The latest IFPI report describing the economics of the recorded music business of 2017 is out and among the interesting tidbits is the fact that there was more music streamed from YouTube last year than Spotify, Apple Music and all other streaming platforms combined. Considering that the per user royalties paid back to the music industry was smaller than the other platforms (at least according to the industry), that becomes the crux of what is now described as a “value gap” and a main reason why the music industry isn’t doing even better than it is today.
According to the IFPI’s Global Music Report, the video streaming platform attracted 46% of all music streaming listening time around the world last year, excluding China. This was based on research compiled by Ipsos that looked at the internet use of people aged 16-64 in the world’s 13 leading music markets. China was not included since the researchers could not find published data for music users in the country.
Since paid streaming was responsible for 23% of total listening and free audio streaming 22%, that meant that traditional music streaming platforms were responsible for 45% of all music streaming, which was 1% behind YouTube. Other video platforms like Vevo and Vimeo made up the remaining 9%.
The IFPI also reports that music streaming platforms attracted a total of 272m users last year, while online video services served up music videos to over 1.3 billion, which is a huge disparity.
Not surprisingly, YouTube saw the figures regarding the company in the report differently. The biggest bone of contention was the royalty amount paid out by the company last year. According to the IFPI, that figure topped out at $856 million, while YouTube told Music business Worldwide that “In the last 12 months alone, YouTube has paid out over $1 billion dollars to the music industry, just from ads and that number is growing year-over-year due to the licensing deals we have in place with the overwhelming majority of labels, publishers, and collecting societies.”
YouTube music use seems to be flattening out as more and more users get comfortable with streaming services, but it’s still a major factor in music distribution. The big question is what will happen when the service launches its new YouTube Remix service, which is reported to happen later this year. As far as artists and labels are concerned, they better see more money coming their way as a result.