YouTube’s Value Gap is the Record Industry’s Biggest Problem To Fix, and Here’s Why…

If the record industry is serious about growing streaming revenues (and the digital economy in general) it must address the problems with the exploitative practices of Google’s YouTube. We’ve been lucky to be supplied with Content ID data from the same source as our previous data – so we added that into the mix to see where it would rank.

These numbers are just staggering.

If you combine Content ID to the YouTube Subscription numbers you arrive at a whopping 63% of total streaming market share that only contributes  11% of revenue. Ya’ll taking notes here?

yt_istheproblem

 

Look at the combined YouTube revenues of Subscriptions and Content ID together at 11% of revenue. That puts the combined earnings at #3 in market share behind Apple Music. However, Apple Music creates more earnings than the two combined YouTube Revenue streams with less than 4% of the consumption. You’ll also notice that YouTube is the only streaming service with three zeros following the decimal point. That means YouTube is paying hundreds of dollars per million streams while the other leading streamers are paying thousands.

Apple Music generates 12% of revenue with less than 4% of streams. YouTube generates 11% of revenue with 63% of streams. Does that sound like a problem to anyone else?

As of this writing we’re not factoring in the direct channel uploads for artists to YouTube or Vevo, however we just can’t imagine that those numbers are much different in terms of plays versus revenues. We hear from a lot of label folks that they are afraid to give up their annual revenue from YouTube sources, but all we can say is that you’d be gaining more much more than you would be giving up.

We’ve heard of at least one executive who met with resistance when faced with the prospect of potentially walking away from millions of dollars a year in YouTube revenues. But, it’s not walking away from millions, it’s giving up 10’s of millions in true revenue.

Let us not forget, that this devalued revenue will prevent the overall growth of streaming as a format. With streaming revenues (largely from Spotify and Apple Music) now accounting for approximately 40% of overall digital music revenues why should YouTube be able to pay 1/10th of the other major players? Oh, that’s right because of user pirated content uploads…

It’s time for the record business to get serious about cleaning up YouTube.

 

Fixing the Digital Economy by Jaron Lanier | The New York Times

Insightful commentary in the New York Times from Technologist, Inventor, Author Jaron Lanier. Both of Jaron Lanier’s books are recommended on the Trichordist Bookshelf.

TWO big trends in the world appear to contradict each other.

On the one hand, computer networks are said to be disrupting centralized power of all kinds and giving it to the individual. Customers can bring corporations to their knees by tweeting complaints. A tiny organization like WikiLeaks can alarm the great powers with nothing but encryption and net access. Young Egyptians can organize a nearly instant revolution with their mobile phones and the Internet.

But then there’s the other trend. Inequality is soaring in rich countries around the world, not just the United States. Money from the top 1 percent has flooded our politics. The job market in America has been hollowed out; unpaid internships are common and “entry-level” jobs seem to last a lifetime, while technical and management posts become ever more lucrative. The individual appears to be powerless in the face of tough prospects.

READ THE FULL STORY AT THE NEW YORK TIMES HERE:
http://www.nytimes.com/2013/06/09/opinion/sunday/fixing-the-digital-economy.html