YouTube is the poster child for skimping on royalties when it comes to paying artists and songwriters. It takes 45% of the ad revenue generated from a monetized video, when all other streaming services are around the 30% or less range per stream. That said, the company sure is making a lot of money, with a reported $5 billion dollars coming in just in the last quarter alone.
What’s more, it looks like YouTube Music, a service that didn’t look like it had any legs, is now at 30 million subscribers, according to the latest Alphabet (owner of YouTube and Google) financial report. The number grows to 35 million when free trials are included. That means that the service has added around 10 million new users in this year alone.
But the real story is that YouTube’s advertising revenue has grown a great deal just in this last year, growing by more than $1.2 billion.
That’s all well and good, but the big question remains – how much of this will actually flow back into the music industry? The online research firm Pex found that music makes up only 5% of the content on YouTube, yet it gets 22% of all views. With increased ad revenue you’d think that artists should be seeing an increase in royalties from the platform as well.
The problem is that less than 1% of all YouTube videos ever reach the 100,000 view mark. At that point the royalty is going to be minimal.
There are many factors that go into monetizing a video, including the time of year, the market that it plays in, the audience that views it (which determines the sponsors and how much they’ll pay), and many more.
All that means that for the average artist, huge YouTube revenues probably will only mean a slight bump in their royalty checks. The real winner, as always, is YouTube.