Google has released information that suggests that the music industry has benefited from the company's YouTube platform, to the tune of $1 billion in the last 12 months alone.
The billion dollar payment refers to ad revenue that has been paid to musicians, labels and music publishers by the video sharing platform in the past year.
The announcement, made via the official YouTube blog by the company's chief business officer Robert Kyncl, is the latest effort to head off criticism from the music industry, who accuse Google of profiting from freely uploaded music at the industry's expense.
The industry and high profile artists including Katy Perry and Bruno Mars, are demanding that Google do more to stop the piracy problem on YouTube and also to pay more for content.
Instead, YouTube says, the music industry's revenue problems stem from the fact that another fundamental shift is occurring, with users moving away from selling songs to an ad-supported and subscription based model.
The previous major shift, which say consumers move away from purchasing albums to digital tracks, say industry revenue plummet from the halcyon days of CDs, in the late 90's.
YouTube's Kyncl says that advertising revenue from YouTube and other similar services will become an ever more important new source of revenue for musicians.
"Even as music subscriptions have been growing faster than any other subscription type, advertising is another powerful driver of revenue. In fact, in the last 12 months, YouTube has paid out over $1 billion to the music industry from advertising alone, demonstrating that multiple experiences and models are succeeding alongside each other," writes Kyncl.
Kyncl predicts that music will become what television is experiencing right now, that subscription and advertising are the main revenue drivers.
"In the future, the music business has an opportunity to look a lot like television, where subscriptions and advertising contribute roughly equal amounts of revenue, bolstered by digital and physical sales," says Kyncl.
The music industry and its powerful artists argue that while ad revenue has been growing, it hasn't been catching up to the faster growing number of people who are now listening for free. This, they say, is why YouTube needs to share more of its revenue with musicians.
YouTube is estimated to have earned $9 billion in revenue in 2015.