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Business News Digital Labels & Publishers
YouTube launches new music micro-licensing service for its video creators
By Chris Cooke | Published on Wednesday 21 September 2022
YouTube yesterday announced a new service called Creator Music which aims to make it easier for creators on the video platform to use commercially released music in their content while still monetising their output.
The new service within YouTube Studio will allow creators to access a range of music provided by record labels and music distributors. Creators will be able to license the use of that music in their videos, choosing to either pay an upfront licensing fee or to share future ad income with the label or distributor.
As YouTube notes in its blurb announcing the new service, “the complexities of music licensing has meant that most long-form videos that feature music don’t result in the creator getting paid. So, in recognising an opportunity to build a bridge between the music industry and creators on our platform, we’re redefining how music can be featured in creator videos”.
Under the existing system, if a YouTube creator uploads a video that contains commercially released music, the recording is likely to be picked up by the video platform’s Content ID rights management technology. The label or distributor in control of the featured recording can then allow, block or monetise the video. In most cases, they are likely to monetise, so take the creator share of any ad income YouTube generates around the content.
For true user-generated content that system works. The user gets to legally include commercially released music in their video and the label or distributor makes some extra money. And while the income from each user-generated video is likely quite small – unless it goes mega viral – there are an awful lot of videos on the platform.
YouTube’s Global Head Of Music Lyor Cohen last week said that 30% of the $6 billion YouTube paid over to the music industry in the twelve months up to June this year came from user-generated content.
But the current system doesn’t work for full-on YouTube creators, who want the creator’s share of any ad income for themselves. That has created a big opportunity for the production music sector, and especially those production music libraries which have developed simple YouTube-centric products making it really easy for video-makers to access and make use of music through a single global licence. Epidemic Sound is a notable player in that domain.
Of course, in theory a YouTube creator could try and sort out bespoke licences from labels and publishers for any commercially released music they want to use. But navigating all that is complicated for what are often one person content businesses, plus few labels and publishers are set up to deal with micro-licensing, ie issuing sync licences where each customer spends a small amount of money, but there are potentially millions of customers.
So, licensing of that kind has never really happened. Although, more recently, start-ups like Lickd have sought to provide a platform that facilitates such licensing for the benefit of both creators and music companies. And the Lickd platform currently offers creators access to more than 1.1 million tracks.
At launch, YouTube’s Creator Music has several hundred thousand tracks in its library mainly made available by independent distributors like Believe, Downtown and Empire. However, YouTube’s VP Of Music Licensing Christophe Muller says that talks are underway with everyone in the music industry – including the majors – about them participating in the new music licensing service.
Participating labels can set how creators can use their music. If they charge an up-front fee, which they can set, the video maker licensing the track would then receive all of the creator’s share of any subsequent ad income linked to their video, which is 55% of any ad money YouTube generates.
On the revenue share model, the creator’s share would be split 50/50 between the video creator and the label or distributor that controls the recording rights. The separate song royalties would presumably come out of the 45% taken by YouTube, as under the current system.
YouTube’s official blurb goes on: “Creator Music, currently in beta in the US and expanding to more countries in 2023, will offer a streamlined process for creators [and] they’ll be able to instantly see the terms for their song selection. We believe Creator Music will mean more amazing creator-artist collabs, more new tunes in viewers’ playlists, and more ways for artists to break through – all while continuing to put money in creators’ pockets”.
Although Meta is generally someway behind YouTube when it comes to the use and monetisation of music on the Facebook and Instagram platforms – it having only entered into its first experimental licensing deals with the music industry in 2018 – it actually announced a similar scheme to this back in July.
Under Facebook’s Music Revenue Sharing, users can upload videos featuring commercially-released music from its pre-cleared library, with any subsequent ad income being shared out between the video creator, the relevant music companies and, of course, Meta itself.
YouTube’s new Creator Music service was unveiled alongside some other announcements regarding how YouTube supports creators on its platforms. The other news mainly related to YouTube’s TikTok rivalling Shorts, including new specific Shorts-centric criteria for when video-makers can qualify to join the YouTube Partner Programme, which offers access to all the monetisation and licensing tools. Those will sit alongside the existing criteria which apply for the makers of longer form videos.
There was also confirmation that YouTube is shifting to a revenue share model with Shorts – akin to rest of its platform – rather than having a fixed fund to share with the creators of short-form videos. That revenue share model will also see a cut of the money going to the music industry to cover all the music that is used in videos posted to Shorts.
Commenting on all this, YouTube CEO Susan Wojcicki says: “The YouTube Partner Programme was revolutionary when we launched it back in 2007, and it’s still revolutionary today. Over the last three years, YouTube has paid creators, artists, and media companies more than $50 billion dollars”.
“That $50 billion dollars has changed the lives of creators around the world and enabled new voices and stories to be told”, she adds “But we’re not done yet. When we introduced the YouTube Partner Programme, we made a big bet: we succeed only when our creators succeed. And today, we’re doubling down. We’re introducing the next chapter in how we reward creativity on our platform by expanding access to our YouTube Partner Programme”.
And the aforementioned Cohen says: “Creator Music is the future. We’re building the bridge between artists and creators on YouTube to elevate the soundtrack of the creator economy; it’s a win-win-win for artists, songwriters, creators and fans. With Creator Music, artists have a new way to get their music out into the world; fans can now discover music they love on their favourite creator’s channels; and both creators and artists will have new revenue opportunities”.
