Labels Considering Removing Artist Videos From YouTube

In a dispute that's reminiscent of what happened with MTV in the 1980s, the 3 major labels are considering removing videos of their most prominent artists from YouTube, according to various reports.

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.

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iRadio's Interesting Royalty Rates

With Apple's new iRadio launch on the immediate horizon, everyone is interested in the royalty rates that it will be paying. Last week details of Apple's indie deals began to leak out, and they're pretty interesting, not only because of the rates they're paying, but because of what they won't be paying on as well. Here's what we've learned:

• The first year, Apple will pay $.0013 "per royalty bearing performance" (that's the key) plus 15% of net advertising revenue.

• That increases to $.0014 and 19% the second year.

• These rates are roughly comparable with what they're paying the majors, although slightly lower.

• It's more than from Pandora though, which pays $.0012 and no advertising.

But there's a catch. Apple drives a hard bargain, and there are some additional terms on what it will not pay on.

• Apple won't pay royalties on any streams during the initial 120 day beta period

• It won't pay on any "Complete My Albums" plays.

• It doesn't have to pay on up to 2 songs per hour if the tracks already appear in the listener's cloud collection.

• It may or may not pay on any Heat Seeker promotion at its discretion.

To be honest, these limitations don't feel unfair, since the company wants to ensure that the service gets off the ground by not paying during beta and paying a reduced rate during the first year. Regardless of these limitations, iRadio still looks like a better deal for the artist than Pandora even during the first year.

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