Peter Mensch, the manager for such multi-million selling musical acts as Metallica, Muse and the Red Hot Chili Peppers, has strongly criticised the damage he perceives YouTube is doing to the music industry.

Speaking on a new BBC Radio 4 documentary, the 63-year-old industry veteran said of the popular video-sharing website:

"YouTube, they're the devil. We don't get paid at all...

"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".

In response, YouTube CEO Robert Kyncl argued that record labels are to blame:

"It really depends on what is the flow of the money from us to you.

"The artists who are signed up directly with YouTube are seeing great returns. Not everybody – but if you're generating a lot of viewership, you're making a lot of money."

Mensch's comments come one week after release of the annual report from the International Federation of the Phonographic Industry (IFPI), which highlighted the growing value gap between the consumption of music on non-subscription user upload services and the revenue they generate for artists.

While digital revenues rose by 10.2% last year to $6.7 billion and overall revenues were up 3.2% to $15 billion (the first significant year-on-year growth in almost two decades), the report argued that artists were not earning a fair amount when the scale of music consumption is taken into account.

The IFPI called for the introduction of legislation to solve the problem, with its Global Music Report stating:

"Digital revenues now account for more than half the recorded music market in 19 markets.

"However, there is a fundamental weakness underlying this recovery. Music is being consumed at record levels, but this explosion in consumption is not returning a fair remuneration to artists and record labels.

"This is because of a market distortion resulting in a "value gap" which is depriving artists and labels of a fair return for their work".

IFPI chief executive Frances Moore commented:

"There is good reason why the celebrations are muted: it is simply that the revenues, vital in funding future investment, are not being fairly returned to rights holders.

"The message is clear and it comes from a united music community: the value gap is the biggest constraint to revenue growth for artists, record labels and all music rights holders.

"Change is needed – and it is to policy makers that the music sector looks to effect change".