Out of all streaming sources, YouTube pays the lowest royalty rate and the labels are looking for what they consider a more fair split (it's currently 55% labels/45% YouTube).
The platform has long been a source of frustration for the majors, since YouTube has a firm grip on the ad policy, sales channel and monetization and the labels have very little say.
Perhaps throwing fuel on the fire, YouTube recently announced that the number of advertisers increased by 40% last year, with the average spend up more than 100% over a year ago. What's more, YouTube's revenue was over $6.6 billion last year, but the music industry only saw about $150 million of that, according to the RIAA. YouTube disputes that figure and states that it's really "in the billions," although no hard figures are given.
While the majors are quietly increasing their support of other platforms like Vessel and Snapchat, they're being careful about removing support from YouTube just yet. The platform is still where most people consume music (especially new music), and it still provides a significant source of income.
Plus, with YouTube's Music Key subscription service around the corner, that income could possibly increase even more, although most top level label execs are skeptical.
However it shakes out, this bears watching.
2 comments:
IT's ABOUT FRIGGIN TIME YOU GREW SOME BALLS!!! Free kills any market, doesn't matter what the product is. Just ask ANY economics professor. And after that you can start yanking all your Pandora and Spotify.
Well almost anyone knows by now that you can grab any mp3 audio from any YouTube video for free
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