I’m East Bay Ray. And I Think YouTube Has Forced 12,000 Musicians Out of Work…

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.

40 Responses

  1. Visitor

    Something tells me at least that many have started a music career now, thanks to the publicity recieved from youtube.

    These numbers are completely worthless.

    • Visitor

      there is no new middle class of professional musicians. just because more hobbyists can me “some money” does not mean there are more self sustaining musicians with full time professional careers.

      the top tier artists are still professionals, and the hobbyists don’t care to be – so that leaves the reduction in middle class musicians… see here…45% less professional musicians is not progress.

      If the Internet is working for Musicians, Why aren’t more Musicians Working Professionally?

    • every bieber

      For every Justin Bieber created, there are thousands (tens of thousands) of artists who have seen a huge decrease in income due to theft (aka illegal downloading), and have gone from earning musicians to… well, broke musicans.
      I knew a guy who for decades made a middle class income from royalties from the first album with a famous band he started (and left). Everytime that band released something new, back catalog sales increased, so it was steady. That all stopped with illegal downloading… and Youtube streaming replacing a quick iTunes purchase.

      So for every “Gangnam Style” youtube success you love, there’s lots of lesser-knowns being hurt.

      • hippydog

        Quote “and Youtube streaming replacing a quick iTunes purchase”
        You do realize thats nonsense right?

        • This Guy

          Something tells me you’re are not a musician, nor understand the industry. The reality is people loose money due to illegal downloading and unrestricted “listenings, views, and publicity”.
          If an artist put’s out a song for purchase, and people get it for free. We (the artist loose money. Simple as that.

          • hippydog

            Something tells me your are unable to argue your position so you default to undeserved insults..
            Are you really comparing having a song being played on the radio or youtube (which for all intents and purposes is the same thing in this digital age)
            to piracy?
            are you trying to say that if an artist has a song for sale, but it gets airplay he loses sales?

            Either way.. its kinda sounds like YOU dont understand the industry..

          • what?

            dude, a song played on the radio is not the same thing as on youtube.

            let me illustrate: “Hey I want to hear Dead Kenenedys.” Go to youtube, click on DK video (likely illegally uploaded), hear it instantly. OR: turn on radio, wait for years, still never hear it. OR: spend 99 cents, own it, hear it anytime good quality, also know that some money getting back to the artist.

            also: radio play royalties are better than the .004 cent you get for a youtube play. in the past, radio plays lead to sales precisely because you want to hear the song again, but that’s undercut by a quick youtube “good enough” play.
            the internet is not a bunch of connected tubes, and youtube is not radio.

          • hippydog

            Quote “also: radio play royalties are better than the .004 cent you get for a youtube play. ”
            Actually as per
            your wrong..
            If you compare them directly via “spins” and not “listens” then, and only then, can a person say that FM radio pays better..
            but obviously thats a tad insane.. one spin on radio (being transmitted to thousands of people) being equal to one spin on youtube (being transmitted to one person)..
            and yes..
            pretty much the ENTIRE industry HAS decided that youtube, pandora, siruis, etc etc ARE considered forms of digital RADIO!
            argue with them.. not me..

      • Visitor

        But that has nothing to do with YouTube’s payout practices, that’s the reality of living in the year 2013. Your friend may have lived off sales of masters, but those sales simply are not happening. YouTube is one of the few digital outlets that does pay out to content owners (millions of dollars). If an artist cannot adapt to the ever changing climate, they will fail. Gangam Style is an extreme, but there are so many artists who literally started a career thanks to the YouTube platform.

        • Visitor

          the pay out practices are the result of competing with corporately sponsored and financed open thievery.

    • Visitor

      yes there certainly are some YouTube stars, but overall if YouTube is such a great promotional tool, how come there are 45% fewer working muscians now then ten years ago? (Bureau of Labor Statistics). it’s a myth that it’s helping muscians overall.

      BLS data:
      2011 – .
      2002 –

  2. Far East Bay Ray

    This guy is out of touch. Very bad math. There is a whole new generation of musicians who owe their entire existence to youtube.

    • FarePlay

      “EXISTENCE” being the pejorative word.
      First off, a big thumbs up to East Bay Ray, who has the courage, passion and commitment to stand up for his work and the work of others.
      Why is there always someone that says “these numbers are ridiculous” not because they are concerned with getting the facts right, but rather to say: “this is bullshit”.
      While we’ve been moving in the right direction for the past few years with the pioneering work done by Ellen Seidler of popuppirates, Trichordist, Music-Technology-Policy, digital Music News and most recently, Jon Taplin at USC, piracy is still a confusing mashup of public confusion.
      In today’s Torrent Freak there is a story about the overload of takedown notices and that blog’s massaging of the information: “Over the past months the number of removal requests has increased dramatically, up to a point where Google hinted that the massive number of takedowns could threaten freedom of speech.”
      So, while other’s will support criminal enterprises that profit from others work without compensation under the guise of “Free Speech” we’ll keep reality in play to ensure that middle class musicians countinue to “exist”.

      • hippydog

        YOUR RIGHT.
        things like “facts” and “reality” should never get in the way of a good story..

        • or grammar get in the way.

          your right
          you are right = you’re rightor grammar get in the way.

    • Visitor

      there is a new generation of musicians, but overall there are 45% fewer working musicians now then ten years ago. so while YouTube makes $1.2 billion, there seems to be alot less working musicians. maybe there’s a connection? if you really want to see your internet be better, maybe lay off working guys and call out the greedy businessmen exploiting them? rather than make excuses for them?

      BLS data:
      2011 – .
      2002 –

  3. Guest

    I love your music, but you’re wrong –
    1 – Millions of people who would never have heard one of your songs was able to because of youtube.

    2 – YouTube has an iTunes and Amazon link next to your song –
    How many people bought your song because of YouTube? 1,000, 10,000 1000,000?
    3 – YouTube is like radio and iTunes ia like the record store – The Dead Kennedys made no direct money from radio back in the day, but made tons of money because of the exposure radio (youtube) brought . If anything YouTube is better because you can buy the song with a few clicks vs radio where I hear a song and hope the DJ told me the name of the song – If I was lucky and he told me the name of the song, then I had to get in my car and drive to the record store and hope they had that song in stock, if they did not have the song they would order it. But if it was not a big hit and they stopped making the record I may never be able to buy the song.

    • FarePlay

      While I amy have mixed feelings about the value of YouTube and agree that it can be a great promotional tool, once again it comes down to choice and who has the right to decide what happens with their work.
      I was looking for a clip from the “Last Waltz” concert last Thanksgiving. What do I find? A video with a picture of the album cover and the entire soundtrack in sequence.
      No Levon Helm R.I.P., nothing…….
      But what really pisses me off; if you go to their parent company google and search for “youtube free download software” no challenge there, you have lot’s of choices.
      Kind of like a jewelry store with expensive inventory they want to get rid of and great insurance posting the combination to their safe on Craig’s List.

      • Visitor

        Google may own YouTube but they are completely independent operations with very different missions. Google is meant to catalog and store the world’s information. Free speech to the max. YouTube spends millions of dollars preventing content from getting online that should not be. Many things YouTube does are in direct opposition to the mission of Google. Any search engine will give you those results.

        • Visitor

          “The idea that you ultimately own your data is pretty fundamental to creating effective privacy. If you’re the sovereign “owner” of your data, then everyone from the spooks to Facebook must come to you and seek your permission – and justify using it. But if you don’t “own” anything, then you have nothing to assert. If you don’t “own” your data, then you are the product.

          But the idea of attaching ownership to digital things is bitterly fought. Google fights every attempt with the response that it “breaks the internet”. This fight against ownership and permissions is actually the bedrock of Utopian belief – that nobody can own, or deny, or exclude, or assert rights on digital things.

          And the principle for which those crazy copyright industries have been fighting – not always wisely or persuasively – is more important than you might think. A world where we can’t assert ownership is one without any privacy – which is not a world many people want to live in.”

          If Google’s only taking a COPY of your personality, why worry?

  4. Inconsistency Much?

    Did YouTube pick up a guitar and start playing tunes for the masses? No. So the argument really falls flat. If you’re going at it from a solely record sales side, that’s also flawed. Remember that fans wane and records have a natural shelf-life. The Dead Kennedys were great, but how many new fans embrace the dated material? Not exactly Beatles territory here, so there’s a natural petering out.
    Remember that the 1980s produced the CD, with ensuing music industry boom, until it plateaued in the early 00’s and produced an ensuing market correction “crash”. If anything, YouTube, Spotify, Rhapsody, etc. are the market correction – giving back to music fans (music) what was taken from them (overpriced CDs) in previous decades.
    I respect the sentiment – but this is the wrong way to go about it. Want to supplant YouTube/Spotify/etc.? Build the servers, code, etc. It’s doable. Or if you’re pissed off at it – do the same thing some artists/labels have done with their tentpole releases on Spotify and start blocking videos from appearing there through your label or publisher. See if that accelerates the decline in your fanbase or has them coming back because Guitar Hero 5/6/7 isn’t coming out anytime soon.

  5. zogg

    This article is pointless is this guy a joke to every musician out there ” You Tubes” for publicity and nothing else. You’d better figure out another way to sell your music then if your denouning them. Though I will admit you got your 15 minutes of fame in with this piece. How about putting out music that someone wants to listen to and buy!

  6. el Gallo

    All you have to do is look at this guys “activist” (code word for socialist) past to see that the objective has nothing to do with improving the lives of musicians. The party line has always been, and continues to be; incriminate capitalism, especialy big buisness, by whatever means necessary. No matter how stupid, how poorly thought out, or if it’s a right out lie, just reach for an “opressed” and exploited button, throw ehough feces against the wall, and something is sure to stick. And fo course an aging, fading rock “star” can put a little jolt into a pase career.

  7. hippydog

    Quote “YouTube’s deal is they split it 55/45, 55 to the artist, 45 to them. But, it’s after expenses, [snip] . So, taking 36 percent off the top, it kind of works out that they are paying 35 percent, and taking 65 percent.”
    OK.. that makes sense.. Google only pays out around 35%..
    Quote ” 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. ”
    Full Stop.. WHAT!??
    If youtube had paid the same percentage of Itunes? WTF??
    You think a streaming service thats heavily controlled and DRM’d, with questionable quality VS a direct download that can be copied and played most anywhere IS EQUAL IN PRICE? really? The two services that are completely different can be compared that easily? really?
    Terrestrial radio pays out almost nothing, but thats not an issue? THATS completely fair? really?
    many streaming services pay out even less.. but lets go after Youtube first? really?
    I’m not saying a payout of 35% and 600 million is fair.. I believe a person has a right to make a living from their art..
    I just dont think comparing the payouts between two different services makes any sense..
    Not only is the MATH faulty, but so is the LOGIC!

    • Visitor

      YouTube pays less than the other streaming service, .0025 vs for example .004 from Spotify

  8. Visitor

    Talk about funny numbers!
    Does East Bay Ray realize that he and every other music publisher has the ability to completely remove their content from YouTube? YouTube is one of the FEW if not the only free media platform that actively encourages content owners to monetize their content. YouTube actively seeks deals with publishers, and always gives the option to take down content if they don’t want to monetize. This guy sounds like Prince in terms of out-of-touchness with the industry today.

  9. PTSoundHound

    Just been watching a YouTube vid on how to change the battery on my electric toothbrush.
    Wonder how much of that $1.2 billion in profit was generated by that toothbrish vid? Or perhaps the cat falling into a swing-top bin? Or skaters getting pulled along by trucks?
    Turns out thre are one or two videos on YouTube (and hence a good chunk of the profit) that aren’t connected to music…

  10. Bandit

    It is unfortunate that such questionable math and logic was used to attack one of the few digital distributors that tries to get money to content creators. We get it Ray you are angry but welcome to the new reality, the old days are gone.
    Yes, the new digital streaming business models suck for musicians. However, it is not because these businesses are evil or wrong, it is because too many musicians are still living in the old business model past. Musicians today (or their managers for the lazy ones) have to change and adopt to the new business models to survive and yes actually make a living. It can be done but it won’t get done by whining about youtube or using dubious statistics.
    What would help (and is actually an old school markeing tactic) is if you did something outrageous and monetize the media attention that follows. The way the Dead Kennedys did it in the “old days.”
    Complaining about money is not very punk or outrageous, not even interesting.

  11. Visitor

    If anyone doesn’t belive that you tube is ripping off musicians. Please allow me to come into your workplace, steal your work, heck ill promote it for free while I rake in cash and come back and give you pennies on the dollars you should be making. In your nut job logic, I should be able to go into a store rob them, leave them some pennies and justify it because I did give them a few pennies. And people wonder why the quality of music is in the toilet now adays. I mean when I grew up people like led zeplin, the beetles, eric clapton were the justin beibers, ganham style of today. So get used to crap.

    • hippydog

      I’m sorry..
      but your entire arguement was made null and void by the fact you just compared led zep, the beatles, and eric clapton to justin beiber..

  12. Just give me some truth

    Those who have never worked in the music industry (ie: most of the commenters here) should not be trusted to have anything useful to say about how the music industry works. Simple.

    -guy who works at a record label

  13. Visitor

    And East Bay Ray proves he is a complete idiot with no understanding of how the real world of the internet works.
    Not to mention the fact that the actual artist almost never sees any of the money anyway, because ot goes to the record companies instead.

    • sigh

      “none of the money goes to the artist anyway”.
      sure love hearing that justification for “I don’t pay for music” over, and over, and over again.
      just below my other favorite “this the way things are now so adapt or die” argument robotically repeated ad infinitum. (as if things could never be changed for the better of the creators due to laws or education… just accept the stealing)

  14. Visitor

    intersting, some folks here are defending the man rather the artist that’s being screwed. power to the corporations! some must think a free ride on carnival horse that’s being starved so tech businessmen can get rich is fun!

  15. Visitor

    Tell East Bay Ray that all YouTube files are downloaded through Mozilla’s Video DownloadHelper on Firefox, funded by Google, since 2007 with 125 Million users for that one application (there are hundreds), and if he doesn’t know that and won’t report it in his “journlism articles”, but cries low royalties, then he deserves what he gets.

    Oh wait…..didn’t Google/YouTube also “LIE” in the Viacom case that no downloads occur to avoid MGM v. Grokster? But all files are downloaded, telling a US Federal Judge that no downloads occur.

    Cry foul, East Bay Ray. Cry way, wah, they’re downloading my stuff off YouTube too to pay no royalties?