We’ve been supplied nearly a year’s worth of Content ID data from a mid-sized indie label. Over the course of about a year here’s what the data shows:

After nearly a year and 80 million plays, the net average per play amounts to less than $375.00 per MILLION Plays on YouTube. Ok, that’s just for the sound recording, there are two other parts to the uploaded copyright, the musical composition and the video content itself. Assuming each of the three parts earns an equal share (why would they not, but how would we know given YouTube’s usual secrecy sauce?), then the full amount payable by YouTube for 1 Million plays via Content ID would be $1,125, or $.001125 per play (on average).

We know that on directly uploaded videos where the creator or rights holder is claiming all three copyrights they are being paid more than $1,125 per million plays on average. So why is the revenue reduced when claimed on Content ID?

The other interesting thing about this data is that there is ZERO consistency on what one play is worth. For example, in what world, and under what circumstances is nearly 70,000 plays worth less than $.30? We’ve heard that the major labels may have a per play floor (or indirectly get the equivalent in off the books “breakage”), but after reviewing this data even that is hard to believe.

The lack of openess, transparency and consistency makes it virtually impossible to determine what the true value of a play is within a single category like a Sound Recording let alone comparing the comparable rates paid for Song Writing and the Video itself. Oh yeah, and there’s no audit clauses either – how convenient.

It is still shocking and amazing to us that after a decade YouTube is still not profitable and is being subsidized by Google’s monopoly money from search and data scraping, and yet digital music executives have been trying to sell us on this as the future of revenue for musicians. How is it that after a decade YouTube can not make a profit? If this is the new financial standard for record labels we can see that it’s starting to work! Is this the genius business model labels are embracing? No profit for a decade? If this is the new standard then we suppose everything is fine…

YouTube’s Content ID presents the same problems and challenges of virtually every other ad-supported streaming platform – it’s just math, and it doesn’t work.

There is an even darker side to YouTube that is exposed in Content ID. Even though the video pictured below was eventually removed from YouTube (via a manual DMCA claim) it illustrates the core problem of YouTube in general.

Here’s the music of Jack White being used to sell Sex Tourism and perhaps even Human Trafficking and Sex Slavery.

Note the Ads by Google with the fine print asking YouTube users to “chat now” or “send gift” for asian girls in Thailand and China as well as filipinocupid.com.

Artists have no consent over where their music is being used, or for what their music is impliedly endorsing or selling. It’s not a big leap from the above to political uses where an artist’s song can be exploited to endorse political candidates, ideologies and issues to which the artist is philosophically opposed.  Like human trafficking.

We have a hard time believing artists would lend their consent to these types of videos (if they knew at all), but then again, you never know when dangling that carrot of thirty cents of revenue in front of them…

So in a world where Spotify is paying about $5,000 per million plays on sound recordings, YouTube by comparison is paying less than $375 for the same million plays. So let’s add this up.

On YouTube artists have no consent and are granted no licenses for the (infringing) distribution for the majority of their work and they’re paid less than 1/10th of what Spotify pays for the same sound recording. Wow, just wow. Ya’ll doing the math on this?

If you thought that Spotify was problematic as an ad-supported streaming platform one has to wonder what could possibly be attractive about YouTube… Oh, you don’t have a choice. You do what YouTube and Google tell you to do as we saw with Google’s “notice and shakedown” practices with Zoë Keating and indie labels. The great decade long experiments of ad-supported streaming are a disaster for artists and rights holders while cannibalizing transactional revenues that once sustained the industry.  Not to mention Google taking down an eye popping 180 million infringing videos from YouTube.

Although streaming is no doubt the future of distrbution, the mismanagement of this transition may well be the worst planned in the history of the industry.

Our advice to artists, particularly artists who own their recordings, is it’s time to take a pass on that $375 per million views and toggle your Content ID setting to “Block In All Countries.” How about adding a little scarcity and reality back into the economics of online music distribution? If YouTube wants to monetize your work maybe they can come up with a fair license.

It’s just math. Just say no…

OK, let’s review, you can enable Content ID and make $375 per 1 million views, or you can Block In All Countries. The choice seems pretty obvious, doesn’t it? It’s pretty stunning when Spotify start to look like the good guys.