The Dead Kennedys were on YouTube for years before the band finally claimed a cut of the advertising. But according to band guitarist Ray Pepperell (aka, East Bay Ray), that’s small potatoes. Because based to his calculations, YouTube’s payout practices have forced approximately 12,000 artists into low-paying, non-musical jobs. Here’s the breakdown he shared with Digital Music News at SF Musictech Summit on Tuesday.
East Bay Ray: YouTube has forced 12,000 independent musicians out of work.
Digital Music News: Where did you get the 12,000 number?
East Bay Ray: YouTube’s deal is they split it 55/45, 55 to the artist, 45 to them. But, it’s after expenses, and so after looking at the financial reports, Google’s basic expenses are 36 percent.
So, taking 36 percent off the top, it kind of works out that they are paying 35 percent, and taking 65 percent. So YouTube’s profit last year was about $1.2 billion, profit, and they paid out about $600 million.
So, if they had done the same percentage as say iTunes, 30/70 instead of 65/35, that’s a difference of about $600 million. Now if you take a middle class musician, say, $50,000 year, year in and year out, divide it into $600 million, that’s 12,000 people that Google has siphoned the money off.
And that’s 12,000 people that are now working in the salt mines of Walmart.