Peter Mensch says streaming sites will be the death of the music business
The manager of Metallica has claimed YouTube is killing the music industry, and described the online video streaming as “the devil”.
In an interview with BBC Radio 4, Peter Mensch, who also manages Muse and the Red Hot Chilli Peppers, said: “YouTube, they’re the devil. If someone doesn’t do something about YouTube, we’re screwed. It’s over. Someone turn off the lights. It’s hard to make people pay for what they’ve been getting for free. That’s consumer behaviour 101.”
Mensch, who is married to the former Conservative MP Louise Mensch, was interviewed for a documentary called ‘The Business of Music’. He was referring to YouTube’s business model, which is supposed to pay artists a share of the advertising served around their content, and which he firmly believes is unsustainable.
Streaming sites like YouTube, SoundCloud and Daily Motion have an estimated 900m users between them, generating a revenue of $634m (£447m) in 2015, according to the annual report of the International Federation of the Phonographic Industry (IFPI). 68m people around the world, meanwhile, pay for music subscription services, but they accounted for about $2bn (£1.4bn) in sales for the industry.
In response, YouTube’s CEO Robert Kynci argued that record labels were to blame for not passing money on to artists.
“The artists who are signed up directly with YouTube are seeing great returns,” he said. “Not everybody — but if you’re generating a lot of viewership, you’re making a lot of money. There are middle-men — whether it’s collection societies, publishers or labels — and what they do is they give advances and they want those recouped. So it’s really hard when there’s no transparency for the artist.”
“The people who don’t have visibility are generally the ones who tend to be less happy. If you don’t have full visibility, you’re somehow more susceptible to negative thinking.”
In a separate statement, YouTube said it had so far paid $3bn (£2.1bn) to record companies, and that that figure was growing.
The statement continued: “Only about 20% of people are historically willing to pay for music. YouTube is helping artists and labels monetize the remaining 80% that weren’t previously monetized. The global advertising market is worth $200bn (£140bn). This is a tremendous opportunity.”