YouTube have reinvented themselves for music in the past year and it’s paying off as musicians are making more than ever before on the world’s home for video.
Only 1 year ago and YouTube was a very different place for artists. The Google owned video giant was scrabbling to sign deals with the major labels and smaller rightsholders and publishing agencies as pressure from the music industry mounted over their poor payouts for artists with a streaming rate lower than all of the music streaming services.
That all changed this year with the launch of YouTube Music. Their new service offers a dedicated music service offering all of their varied music content from full albums to music videos and live concerts. Most importantly of all, with it’s own dedicated platform music now gets paid much more fairly on YouTube and not the same ad-revenues that every YouTube video receives.
YouTube revealed in their new report on fighting piracy that in the last 12 months they have paid out more than $1.8 billion in ad revenues to the music industry. That’s a giant 80% more than the year ending September 2017 when they had generated just $1 billion for the music industry. They say that all-in-all they have paid out over $6 billion in total ad-revenues to the music industry, meaning the past 12 months make up almost a third of all their music payments. That’s how significant YouTube Music is to artists and their livelihood on the video streaming site.
YouTube say in their report: “Combined with revenue from our growing subscription service, YouTube Music Premium, and money earned from monetising fan uploads, YouTube is contributing a meaningful and growing revenue stream for the industry while providing a powerful platform to engage with fans around the world.”
YouTube presented Taylor Swift’s Shake It Off as an example of the success that artists can find on YouTube. By July 2018 Swift’s music video had been watched over 2.5 billion times, which was more than 10x the amount of times it had been streamed on traditional streaming services. According to research by MIDiA, music videos now reach 1 billion views 10 times quicker that they did in 2010.
It’s a lucrative platform and now they’re compensating artists fairly, it’s a great place to be discovered and listened to. YouTube are definitely paying out artists more now but even last August their Head of Music, Lyor Cohen claimed: “Critics complain YouTube isn’t paying enough money for ad-supported streams compared to Spotify or Pandora. I was one of them! Then I got here and looked at the numbers myself.
“At over $3 per thousand streams in the U.S., YouTube is paying out more than other ad-supported services. Why doesn’t anyone know that? Because YouTube is global and the numbers get diluted by lower contributions in developing markets. But they’re working the ads hustle like crazy so payouts can ramp up quickly all around the world. If they can do that, this industry could double in the next few years.” With an 80% increase in music ad-revenue in the past 12 months, Cohen wasn’t wrong.