The Phoenix Center Calculates Damage of DMCA's 'Safe Harbor' On Artist Royalties

YouTube Profits From 'Safe Harbor'

THE PHOENIX CENTER has issued a new Policy Bulletin entitled "Safe Harbors and the Evolution of Music Retailing"  that attempts to calculate how much revenue the recording industry loses from the distortions caused by YOUTUBE's exploitation of the DIGITAL MILLENNIUM COPYRIGHT ACT's "safe harbor" provisions. Employing accepted economic modeling techniques and using 2015 data, the Center found that a plausible royalty rate increase could produce increased royalty revenues in the U.S. of $650 million to over $1 billion a year.

It also found that market-based royalties for subscription-based services are about eight-times larger than that paid by YOUTUBE.

"Outdated regulation is determining where and how people listen to music," said study co-author and PHOENIX CENTER Chief Economist DR. GEORGE FORD. "The fact that DMCA safe harbor exploitation costs the U.S music industry between $650 million to over one billion dollars a year in lost revenues is a sizeable effect and lends credence to the recording industry's complaints about YOUTUBE's use of the safe harbor."

A full copy of PHOENIX CENTER Policy Bulletin No. 41, "Safe Harbors and the Evolution of Music Retailing," may be downloaded free from the PHOENIX CENTER's web page here.

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