The state of the YouTube Music Economy

In 2016, YouTube finds itself in yet another spat with rights holders and this time the labels have brought artists to the battlefield. Playing a starring role is the issue of Safe Harbour, the provision defined in the nearly two-decades-old Digital Millennium Copyright Act that recuses YouTube from liability for User Generated Content (UGC) uploads. YouTube’s ascension to popularity as the online home of skateboarding dogs and MTV videos was welcomed by consumers but fought by MTV’s parent Viacom and the record labels. A record label settlement, a protracted Viacom court case and a Google acquisition later, the YouTube world has changed beyond recognition. But because the labels struck a behind closed doors payment/equity/agreement, the fundamental issue of Safe Harbour was never resolved. It now re-emerges because it prevents rights holders from exercising the sort of control over YouTube that it enjoys over standard licensed services like Spotify. On Spotify the labels can turn off the tap if negotiations go south. On YouTube it cannot.

Gen Z’s Platform Of Choice
YouTube is the music platform of choice for Millennials and Gen Z and is by far the most widely used streaming service on the planet. But YouTube and music rights holders have never been the closest of partners and intensive lobbying and counter lobbying in 2016 has turned up the heat. Rights holders need YouTube more than it does them, but not at any price and they increasingly feel they are being short changed. Partial and context-stripped data have only served to confuse what is already a highly complex and nuanced set of intertwined issues. This is why today MIDiA is proud to announce the publication of our latest report ‘State Of The YouTube Music Economy’ featuring the most comprehensive YouTube music dataset ever compiled with analysis that presents all sides of the argument in an objective and impartial manner.

Here are some of the key findings of the report:

• Safe Harbour-enabled UGC is no longer the threat it once was, with just 2% of music video views from unofficial uploads
• Three-quarters of views are official, and of those, three quarters are Vevo video views
• Covers, parodies and mashups are a key part of the YouTube music economy and now account for more than a tenth of views
• 39% of consumers are weekly YouTube music users
• YouTube rights payments were $740 million in 2015
• YouTube’s effective per-stream rates halved between 2014 and 2015 due to ad market factors
• Music represents 12% of all YouTube viewing time
• YouTube and Vevo rights payments represent 55% of music related ad revenue
• Music isn’t well optimised for the YouTube economy and needs to adopt YouTuber best practices, such as longer and more frequent videos to grow revenue

Posted by Mark Mulligan on Midia, read the full article here.