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YouTube music payouts pass $1 billion, rep claims

By | Published on Tuesday 4 February 2014


YouTube has paid out over $1 billion to the music industry “over the last few years”, Vice President of YouTube Content Tom Pickett announced during a panel at MIDEM yesterday. Something which, contrary to what Pickett probably hoped, didn’t stop people from heckling him.

While Google has been on the receiving end of quite a lot of dissing from the music industry for a couple of years now – labels, publishers and managers routinely questioning why the web firm doesn’t do more to block court-acknowledged piracy operations from its search engine results – in the main, outside of Germany at least, Google subsidiary YouTube has avoided too much music community rage.

Presumably because the video platform has been a significant revenue generator for the labels for some time now, not to mention one of the most important digital marketing platforms. YouTube stats have become so important that new talent can’t really steer clear of the party, and the video platform has built an advertising-based revenue stream for digital music few others can match (without launching within Google’s platform like Vevo).

Yet, as the artist community has got about slagging off Pandora (in the US) and Spotify (in Europe) over the last year about the tiny royalties paid out by the streaming services, we have wondered how long YouTube, which generally offers even smaller per-play pay outs, could avoid the musical wrath. Well, until MIDEM this year it turns out. Perhaps the subscription-based streaming services like Spotify – desperate to reach a mainstream audience to make their business models work – have started telling the labels that the big fat free-to-access YouTube, with its massive reach and licensing preferential rates, is a major problem.

But YouTube is a friend of the music industry, Pickett was keen to stress, hence the one billion dollars line. The stat being a bit of a throw away remark, it’s not really clear what that means. Aside from the fact the figure referred to pay-outs over an ambiguous “last few years”, we don’t know whether that sum includes Vevo money (if not, most Sony and Universal content is not included), or revenue generated by other content owners who have won the right to sell their own advertising on the YouTube platform. And is the billion shared between both the labels and the publishers?

Either way, the claimed billion dollar pay out didn’t really placate anyone in Cannes, many honing in on the fact that Spotify has also paid a similar amount into the music industry, and half of it in just 2013, suggesting that the audio streaming platform – so often knocked for its poor pay outs – is actually paying out lots more than YouTube, despite having a smaller reach and a lot less content consumption overall.

According to The Guardian, the BPI’s Geoff Taylor, sitting on the same panel, voiced that sentiment, suggesting that YouTube should be looking into going the same route as its audio rivals, ie with a premium as well as freemium level. Said Taylor: “I think YouTube has lacked [a mix of free and premium tiers], and that has been a problem for the industry. When I looked at the billions of streams there were in music videos, and the pounds and pence coming in to the industry from that, it was a very small number”.

Watch a video of the panel discussion in full here.