Hate YouTube Payouts? UMG Keeps Remixing Things

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YouTube must absolutely love its relationship with the majors.

The current standoff features a Warner Music Group pulldown in the US, and YouTube pulldowns in both the UK and Germany.

Each contentious negotiation has its own issues, though the deeper problem is the low-lying CPM.  Google is losing money on its $1.65 billion acquisition, and advertisers are finding it difficult to commit serious money to the platform.

Universal Music Group appears more solution-oriented, at least in the current period.  The mega-label and YouTube are pursuing the more acculturated Vevo, a concept that will attempt to skip the riff-raff and boost CPMs in the process.  But that is many months away, according to insiders, and a lower-profile idea has gone live in the interim.

UMG division Interscope Geffen A&M has been spearheading the latest idea, one that transforms videos into a multi-layer trivia challenge.  The “IGA Video Challenge” features the latest vids from Lady GaGa, N.E.R.D., Chris Cornell, Keri Hilson, and others.  Instead of watching the entire clip, the game features short segments – about 30-seconds each – and prompts the viewer to answer a question about the action.

Answer correctly, and move on to the next level.  Miss it, and the video starts over.  Either way, Universal gains serious repeat views, and gets to game CPMs in more ways than one.

According to executives at YouTube who agreed to speak with Digital Music News, CPM percentages on music videos are only paid out after a certain period of time.  That period may vary from deal to deal, though Universal starts its clock at 20 seconds, according to a separate label source.  Of course, videos are much longer than that, and labels only get paid once per video spin.  But step into the gaming format, and video clips keep starting and stopping – and racking additional payouts in the process.

The gaming approach also introduces other benefits.  Users are exposed to a much larger number of artists within a completely different format.  Additionally, the list of videos within the challenge spans different genres, allowing for greater discovery.

At present, views are nearing one million, and the games are planted within various YouTube channels.  That includes the UMG mainline channel, as well as those of various participating artists.

And the key players?  According to information learned over the weekend, Interscope Geffen A&M executive Chris Mortimer has been driving the project inside UMG.  But the label also tapped the brains of Whirled Interactive, a small crew of YouTube wizards headed by ex-HBOers Joe Sabia and Scott Chan.  Among other viral accomplishments, Sabia is one of the originators of the YouTube video “7 Minute Sopranos,” a super-compressed synopsis of the entire series that quickly spawned imitators.

Paul Resnikoff, Publisher.