Over the past year, major labels appear to have woken up to a crucial fact: when fans are listening on YouTube, they’re not listening on other services… and YouTube isn’t paying nearly enough.
According to IFPI estimates, YouTube and other ‘exclusively free, ad-funded platforms’ contributed $641m to the global record industry last year. Subscription streaming services coughed up $1.6bn.
That fact becomes infinitely more damning when you combine it with this one: YouTube has over a billion monthly users, and they love to play music. There were just 41m people paying for music streaming in 2014. Recent Ipsos research even found that more than a quarter of internet users (27%) listen to music on YouTube without even watching the video.
Spotify realises that all this represents a unique opportunity to debunk a music biz myth that has frustrated the Swedish company since birth. It’s the one that goes: YouTube is a friendly promotional tool, while Spotify is an income-focused commercial service.
One hold-over from the days of physical distribution is that feeling that your digital release should be available in as many stores as possible. I remember thinking this way as well in the early days of digital sales … I felt my music should just simply be available in every digital shop the same as how I wanted my vinyl releases in every mom and pop record store. But then came the realization that not all these outlets paid the same (or even at the same consistent time), and that some that didn't push or weren't selling adequate numbers of my label's music were taking up as much of my effort as those that followed through.
Targeting the outlets that give you the most benefit is wise … sort of a loose application of the Pareto principle. If fans are using YouTube to stream your music, but Spotify or Apple Music are paying more per stream, then by all means you should work at pulling the focus away from YouTube.
One problem: if you or your distributor are providing music to Google for Google Play or their related services then you are probably opted in to the YouTube Music Key program. A static, generic video using the cover art will be automatically created for your song and available on YouTube which could torpedo this strategy of exception. Even the One Direction song referenced throughout this MBW article is on YouTube via Music Key. However, as far as I know, YouTube Music Key videos are not available outside of the US due to licensing restrictions … but I'm sure this will eventually change.