Why the Music Industry Is Starting to Hate YouTube…




44 Responses

  1. Steve

    Does this take into account ad revenue or only streaming royalties?

        • Remi Swierczek

          Thank you Paul!
          Vivendi and Vincent Bolore should make you a CEO of Universal yesterday.

          Universal fellowship is the KEY originator of of all acidic music contracting business models.
          Always happy with ZERO common sense, praised by Billboard, RIAA and IFPI.
          Does that $147.5 include payout to VeeVoo, the master slave of YouTube pirate boat?

        • Anonymous

          Thanks for the link. Interesting that YouTube’s estimated 2015 revenue = $6.6 billion. Music probably accounts for half of that. So the music industry’s cut should be at least $1.5 billion.

          So far, we’ve seen $1 billion, though. Not per year. Since day one.


          • Anonymous

            “So the music industry’s cut should be at least $1.5 billion”

            It should in fact be more than $3.5 — for 2015 alone.

            But Google has paid a total of less than $1.5 billion to all right holders during its entire existence.

          • Anonymous

            …um no, the first number was in fact correct.

            YouTube should pay a total of $3.5 billion to all content providers for 2015. And approx half of that should go to the music industry.

            Instead, YouTube pays 10% of that amount per year. So it owes billions of dollars to the creators.

            This is an epic lawsuit waiting to happen.

  2. Jeff Robinsoon

    Not sure what these numbers are supposed to represent. Youtube continues to pay us 7 cents a stream.

    • Me2

      How uploaded copies of copyright protected videos and songs ever got to qualify as “User Generated Content” is beyond me.

      Further, how YouTube got away with passing “actual knowledge” and “red flag” tests is also incomprehensible.

      But there you go.

  3. Tone

    This article is missing a pie chart that shows discovery on YouTube vs the others. YouTube would be 90%+.

      • Cassandra @ The Huge Anime Fan

        I would venture a discovery of a music artist’s music and thereby contributing to more interest from a potential consumer.

        • Paul Resnikoff
          Paul Resnikoff

          The question is humorous in some ways, but incredibly pertinent. Music industry analyst Mark Mulligan has introduced something starkly different with music consumption behavior in the current market, which is that discovery and acquisition are now the same thing. Previously, discovery would happen across limited channels that were largely insulated from acquisition (though not entirely), including radio and recommendations from friends. But even if those discovery moments led to acquisition (via home taping, or CD-burning, for example), that still comprised an extra step. Even illegal download in the late-90s and early-00s (via Napster, Kazaa, etc.) required an extra acquisition step.

          Fast-forward to now, and listening to a song on YouTube already constitutes the acquisition. There is no extra step for a large percentage of music listeners.

          • Me2

            Not up to analyzing exactly why at the moment, but I’m just realized ‘Discovery’ has been on my tune-out phrase list for a while.

      • Anonymouse

        Oh, I don’t know… every revenue stream there is? Do you not understand what ‘discovery’ is?

    • Hippydog

      He makes a very good point..
      Youtube is where just about everyone goes to find out about artists.
      it is literally the #1 discovery, even bigger then terrestrial radio now.. (when it comes to people looking for a specific song or type of song)

      I’m NOT saying Google shouldnt pay.. I’m just saying they are paying more (in the usa) then terrestrial radio..

      • Anonymous

        “He makes a very good point”

        No — it’s like Paul said above: “discovery and acquisition are now the same thing”

    • Versus

      It doesn’t matter; the “discovery” leads nowhere. It does not generate paying customers. If he/she likes the music, the “consumer” will just keep listening over and over on YouTube instead.

      Radio is discovery, when it leads to purchases. And even radio still has to pay for the use of the music. Since YouTube does not lead to sales, but is often the final destination for music, it should pay more than radio.

  4. JTVDigital

    Regardless of the number of streams vs. revenue, YouTube is the place where people (people, not necessarily “music lovers”) listen to music, everywhere in the world, without any restrictions or anything.

    The pie charts are very interesting, what we see is that when adding up all audio-only streaming services in the world, you do not even equal the number of streams from YouTube.

    Now please let me share something:
    [slideshare id=50999976&doc=jtvitunes-yt-spotify-150728054601-lva1-app6891&type=d]

    This shows the revenue evolution of iTunes revenue vs. Spotify vs. YouTube for Q1 + beginning of Q2 this year for our artists and labels.

    What do we see?
    – everything is up (with downloads being very irregular whereas streams and YT revenue trend is evolving positively in a much more consistent way).
    – there is no downloads canibalization by streaming or YT
    – indie artists make money from downloads, streams AND YouTube. It all works and goes up together.

  5. DavidB

    YouTube accounts for about half of all ad-funded streaming revenue (according to the linked NYP article), and ad-funded streams account for a large proportion of all streams, so it is not clear that YT pays badly compared with other ad-funded services (e.g. Spotify free).

    • Name2

      Yeah, but comparing apples to apples and oranges to oranges is not the DMN way.

      Comparing YT’s ad revenue with all revenue from pay services is what you want to do when you want a chart that makes it look like you have a leg to stand on.

      Welcome to DMN!

  6. FarePlay

    Piracy has always had the highest profit margins in the entertainment industry. And YouTube is in a class all by itself.

  7. GS

    What about radio? How long can they continue to be “grand-fathered” into not sharing a piece of their ad revenues back with labels/artists?? Like other “ad-supported” music services, people tune in because of the content played and advertisers, in turn, pay a premium for the right to access that listening audience.

    I headed licensing for a digital service where we took a % of our ad revenue and split it, aggregately, amongst the labels. We were happy to share because we believed it was warranted.

    According to Statista, 2014 US Radio Ad Revenues were $17.51 billion! Imagine if just 5% of that was split, aggregately, amongst the labels…that’s over $850M!

    At the end of the day, if EVERY “ad-supported” music service, whether digital or terrestrial, shared back a piece of their ad revenue, the music industry might not look so dismal!

  8. Chris Daniels

    STOP IT!!! The damn record business is NOT the “music industry” = Paul, you know better than this.

    Every time you mistake the “distribution of recorded music” and the revolution in fan habits and delivery systems for the “music industry” you completely blow it.

    The music industry is everything from home recording equipment and program sales to the companies that make and sell and design major PA systems for traveling shows – to security companies for major concerts. And as far as the actual consumption for recorded music — it is greater than ever. Artist recording royalties are a separate issue and should be approached as such – not that the “music industry “hates” Youtube – that is simple BS. Sorry Paul but you guys need to stop trying to be the New York Post!!!

    • Paul Resnikoff
      Paul Resnikoff

      Artist recording royalties are a separate issue and should be approached as such – not that the “music industry “hates” Youtube – that is simple BS.

      Chris, you’ve called me out, I am being intentionally obtuse here, but there’s a method to my madness. The reason is that this issue isn’t actually confined to the recording industry, or if it is, it is too narrow of a viewpoint. Once upon a time, we thought that the malaise affecting the ‘music industry’ was actually limited to the ‘recording industry,’ given that artists could enjoy far greater touring, merchandising, and other rewards of heavy exposure, increased listening, and enhanced direct-to-fan connections. But over time, that became a fantasy: we found that artists couldn’t survive on the road, recording revenues actually fed a far broader ecosystem which was now starving, and ‘t-shirt sales’ became a punchline.

      That’s why I’ve conflated the two. It’s wrong to segment recordings, it’s not in a silo, and it’s impact on — and relation to — the rest of the music industry is very profound and meaningful to artists, rights owners, and almost everyone else in the chain.

  9. Musicservices4less

    So here we all are, focusing on the real problem effecting everyone who makes music for a living – Youtube/Google. We can all discuss, argue, etc. about numbers and computations. But if you want real change to occur there is a much more important and harder issue that has to be dealt with. Its called the law and specifically section 512(c) of the Copyright Act better known as the Safe Harbor provision of the DMCA. Keep in mind the following:
    DMCA 512 was effective on 10/1998 so it has past 15 years and coming up on 20. It is clearly time for review and change. It was past by Congress during the rise of the tech bubble and related insanity and stupidly supported by Universal/Morris among others in the industry who were very short sighted. Remember, they thought they would get enough political muscle by agreeing with Safe Harbor to amend the “work for hire” issue in favor of record labels.
    Members of Congress were also bamboozled and uneducated on what Google was planning on. Youtube didn’t start until 2005 and purchased by Google a year later. I am sure if lobby records can be opened up to the public, it will show that it was mainly Google and Google lackeys that lobbied Congress for this Safe Harbor provision.
    Now we have had over 15 years of actual “experience” or “devastation” of the music industry DIRECTLY related to the Safe Harbor provision.
    If you care about the music industry, if you care about artists, musicians, producers, vocalists, engineers, etc. you must support the education of the public and vote for those Congress men and women who support the change in the Safe Harbor statute to no longer exempt Youtube like websites.
    @tandem jump above and the Stanford Law Journal article of April of this year, if the Safe Harbor Section 512(c) is amended, the sky won’t fall, there will not be WWIII, Y2K won’t come back, and zombies won’t take over the earth. Fear mongering is the typical response of those in power to combat the masses. I say “Truth To Power”, shed daylight on this issue and lets all say no more free rides to the corporate monster known as Youtube!

    • Troglite

      I LOVE this comment.I want to contribute. Where should I send the torches and pitchforks?? 🙂

      Seriously, what is the best way for members of this community to support the changes you describe? And how do we ensure it isn’t replaced by something worse??

      • Musicservices4less

        I wish I had specific answers for you. My problem is I actually do work 24/7 in the music industry and pretty much all of my time is devoted to making enough money to being able to pay my bills month to month. Back in the day I had a number of volunteer positions. I wish I had a benefactor who could pay some of my bills and I would devote that time to putting together the necessary coalition(s) needed to accomplish what needs to be done to the Copyright Act.
        In the meantime, I am doing everything I can to find enough time to stand on top of the DMN soapbox and scream.

    • Buddy Zappa

      If all the bands musicians and artist would just STOP GIVING THEIR MUSIC AWAY FOR FREE, that would solve alot of the problem right there…. FREE kills ANY market… It doesn’t matter WHAT the product is…. Just ask ANY economic professor…..

  10. Musicservices4less

    Since everybody in the world except the US Justice Department, knows that Google is a monopoly in the area of search engines and perhaps other areas as well, it is high time that Google publish the data it definitely does have to show just how many uploads that are using copyrighted music from third parties without consent and how many of those videos that are uploaded that use music owned by the uploader themselves ie original music. Anyone want to take a guess on that percentage? My guess is above 90% is infringing.

  11. Music Publisher

    Your data is mixing apples and oranges – WHY do you keep doing this?!?!

    Youtube’s streaming service wasn’t launched, those are not all “streams” as you keep insisting. Those are possibly ad generated revenue videos to which YouTube DOES pay out when the owners of a composition are listed. If no owner is listed on a composition then the video doesn’t monetize. Publishers NEED TO GET THEIR YOUTUBE AGREEMENTS! This way they can control whether or not the compositions get monetized when they are used.

    I’m all for stating factual information when you want to slam Google/YouTube, but for the love of God STOP SPREADING MISINFORMATION!!!!!

    • Musicservices4less

      @Music Publisher

      I don’t think ad-sponsored business plan based on views (CPM) works for the music business at all if it replaces arms length negotiations for use of copyrights. If you want to use views, then it should be based on a fixed $$ amount regardless of revenue. That makes it a real business. Now if Youtube wants to do it with CPMs, they must pay advances to EVERYBODY or they can’t use the musical compositions or allow others to upload those compositions.

      “Laws that were designed to exempt passive intermediaries from liability in the early days of the internet – so-called ‘safe harbors’ – should never be allowed to exempt active digital music services from having to fairly negotiate licenses with rights holders.”

  12. Anonymous

    The industry needs to GROW SOME FRIGGIN BALLS and put these greedy ass wipes in check!!! Pandora and Spotify included….

  13. Versus

    Didn’t the music industry always hate YouTube?
    I certainly do. It’s arguably the world’s largest piracy site.

  14. Arjun

    Has anybody thought about viral videos, music discovery and emerging markets? If independent artists and big name bands hate youtube and the internet so much, why don’t they yank all of their official streams and disable googles content id?
    Go back to selling music the old way, see how many of you independent artists get recognized out of your state. When I was growing up in India, western music was Michael Jackson, Green Day, Britney Spears, Led Zeppelin, etc.

    It was so because they were big name artists with massive Pr machines, an indie artist would never have been heard off, now thanks to youtube, people have varied tastes in music, so what if an indie artists gets. Few hundred dollars from advertising from India, that is am extra 200 that you would never get if Youtube didn’t exist!

    And as to music discovery acquisition, nobody thought of live shows, getting a label contract like Justin Biber for example after getting noticed on YouTube? Nothing is ever a pure numbers game.

    And to those trying to change the Dmca, remember once safe harbour is taken away, the comments section will have to be monitored, so no infringing contet is ever posted. You can say goodbye to the web as we know it.


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