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The European Commission is considering a proposal which would force platforms like YouTube, Vimeo and Dailymotion to make better deals with the music industry. Record labels and artists claim there is a “value gap” between the royalties paid by advertisement supported platforms and those paid by subscription based services. Rights holders point to platforms like Spotify as generating more revenue for the music industry despite having a smaller userbase than platforms like YouTube. Google has previously responded to such claims by stating that YouTube has generated $2 billion for rights holders.

Record labels claim to lack the bargaining power to negotiate fair deals because YouTube has such a huge share of the market. The proposal seeks to address this concern by requiring sites that host content to seek deals with rights holders “reflecting the economic value of the use made of the protected content.”

The proposal also requires platforms hosting user-uploaded content to implement “appropriate and proportionate measures, such as content identification technologies, to ensure the functioning” of agreements with rights holders. YouTube uses a system called Content ID to automatically detect copyright infringing videos on its platform. This system was set up voluntarily by YouTube, however, this proposal would make it mandatory. Platforms which do not currently have such a system would be required to implement one. It is also possible that, depending on the law’s final form, Content ID may not be strong enough in its current form to meet the Commission’s requirement.

This proposal is just a draft, and may undergo revision. It is part of a larger copyright overhaul the Commission is working on, which is expected to be in its final form by late September. We have previously covered another proposal within the copyright overhaul, which requires news aggregators to pay royalties for posting snippets of articles.

Is there really a value gap as the record labels claim, and should content hosting platforms make better deals to correct for it? Should automated content identification systems be mandatory? Leave your comments below.

Max Michael

Senior Writer

I’m a technology reporter located near the Innovation District of Kitchener-Waterloo, Ontario.