The music industry has witnessed some dramatic changes over the past decade and a half.
With the rise of digital, people’s music consumption habits evolved dramatically, followed by more change when subscription streaming services came along.
Another popular way for people to enjoy music noawdays is via YouTube. The video streaming platform offers free access to millions of songs, which are often uploaded by artists or the labels themselves.
Still, YouTube is getting little praise from the major labels. Instead, music insiders often characterize the video platform as a DMCA-protected piracy racketeer, that exploits legal loopholes to profit from artists’ hard work.
YouTube is generating healthy profits at a minimal cost and drives people away from legal platforms, the argument goes.
In an attempt to change this perception, YouTube has commissioned a study from the research outfit RBB Economics to see how the service impacts the music industry. The first results, published today, are a positive start.
The study examined exclusive YouTube data and a survey of 1,500 users across Germany, France, Italy and the U.K, asking them about their consumption habits. In particular, they were asked if YouTube keeps them away from paid music alternatives.
According to YouTube, which just unveiled the results, the data paints a different picture.
“The study finds that this is not the case. In fact, if YouTube didn’t exist, 85% of time spent on YouTube would move to lower value channels, and would result in a significant increase in piracy,” YouTube’s Simon Morrison writes.
If YouTube disappeared overnight, roughly half of all the time spent there on music would be “lost.” Furthermore, a significant portion of YouTube users would switch to using pirate sites and services instead.
“The results suggest that if YouTube were no longer able to offer music, time spent listening to pirated content would increase by +29%. This is consistent with YouTube being a substitute for pirated content,” RBB Economics writes.
In addition, the researchers also found that blocking music on YouTube doesn’t lead to an increase in streaming on other platforms, such as Spotify.
While YouTube doesn’t highlight it, the report also finds that some people would switch to “higher value” (e.g. paid) services if YouTube weren’t available. This amounts to roughly 15% of the total.
In other words, if the music industry is willing to pass on the $1 billion YouTube currently pays out and accept a hefty increase in piracy, there would be a boost in revenue through other channels. Whether that’s worth it is up for debate of course.
YouTube believes that the results are pretty convincing though. They rely on RBB Economic’s conclusion that there no evidence of “significant cannibalization” and believe that their service has a positive impact overall.
“The cumulative effect of these findings is that YouTube has a market expansion effect, not a cannibalizing one,” YouTube writes.
The full results are available here (pdf), courtesy of RBB Economics. YouTube announced that more of these reports will follow in the near future.