Sunday, August 2, 2020

Google takes on Denmark

In news related to one of my intellectual pursuits- namely, the internet companies and how they are slowly sucking the economic life out of the rest of us, particularly musicians- YouTube has announced that they will be removing all Danish music from the site in a royalty dispute.

The dispute results from negotiations over a new performing rights organization agreement with the Danish PRO Koda, which is basically the BMI / ASCAP of Denmark. As part of the renegotiation, the current agreement has expired- and in order to temporarily extend the current agreement YouTube has demanded a 70% decrease in royalty payments to Danish songwriters and composers. (It's actually a bit more complicated than this, as the negotiations are being conducted by a Nordic alliance of collecting societies, Polaris, but that's the gist of it- you can read the press release if you want the finer details.)

Obviously this is patently absurd and bullying behavior on the part of YouTube but such is the apparent power of being the most-important-network-node in the room, a position of extreme power and privilege for YouTube and Google to wield and abuse as they fit. (These are Jaron Laniers' Siren Servers).

To put this into a more traditional economic framework: YouTube and other tech giants continue to use their privileged network position to suppress wages of producers (in this case, the composers and musicians of Denmark) in order to provide cheap goods (i.e. free music) to the consumer. It's monopsony in action, and it's exactly the kind of thing that unites the four tech giants who were recently on Capital Hill for testimony, though some commentators didn't seem to quite understand what they were all doing there together because they seem to be all so different. (Hint: they actually aren't as different as you think, at least if you think in terms of their power).

They are the largest aggregators of product in the economy. They will seek to maintain that advantage and shift cost backwards and off their books to the people who make the stuff.

YouTube could conceivably win if Denmark doesn't stand their ground and realize what's good for them. Danish composers and artists are losing money even being on YouTube, it seems like a no brainer to act collectively and aggressively to secure a better deal for themselves. This is exactly the role of a Performing Rights Organization.


As musicians are often told by reply-guy-trolls, if you don't like YouTube's terms, just take your music off YouTube. Well that is only effective if done collectively. Otherwise, you're just Hans Abrahamsen vs. one of the largest companies in the world. This is basically what is happening here, so I hope Danish musicians realize the favor YouTube has done them.

Meantime, if YouTube follows through with the threat, you'll just have to purchase Schnee on iTunes. Or Spotify, I hear they treat their musicians well.

Google's 2019 revenue of $113.26 billion is a third the 2019 GDP of Denmark ($347.176 billion). Google finally released revenue numbers for YouTube of $15 billion, 9% of Alphabet's total revenue. They did not break out YouTube's profitability.

YouTube is probably not profitable on its own, but even it were, it definitely wouldn't be if it had to pay for all the music and videos everybody gives them for free to monetize as they see fit.

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