Music industry

YouTube claims to have paid the music industry more than $6 billion in the past year, including about $2 billion from UGC

MBW’s Stat Of The Week is a series in which we highlight a single data point that deserves the attention of the global music industry. Stat Of the Week is backed by Cinq Music Group, a technology-driven record label, distribution and rights management company.

YouTube says it still intends to overtake Spotify as the biggest music rights industry partner by 2025 – although at present the two companies seem to be roughly keeping pace one from the other.

Today (September 13), YouTube’s global head of music, Lyor Cohen, announced that YouTube has paid music rights holders on US$6 billion within 12 months to the end of June 2022.

This figure is important for a number of reasons, in particular because it is a $2 billion increase in $4 billion contribution to music rights holders that YouTube said it paid in the prior year period (the 12 months to the end of June 2021).

It’s also double the money YouTube said it paid out to the music industry in calendar year 2019 ($3 billion).

things become really interesting, though, when you compare YouTube’s numbers to what we know of Spotify’s equivalent payouts.

Spotify updated its Loud and Clear site earlier this year to confirm that it paid more than $7 billion to music rights holders in 2021, up from $5 billion in 2020.

Like YouTube, therefore, Spotify has increased annual payments to the music industry by approximately $2 billion year-over-year (although YouTube’s growth spanned 12 months to the end of June 2022 Spotify’s growth was the calendar year).

How does YouTube keep pace with its own growth?

Because of one of Lyor Cohen’s favorite phrases: the “twin engine” through which YouTube generates money for music rights holders – namely YouTube’s advertising business, plus YouTube Music / YouTube Premium subscriptions.

Cohen also confirmed today that approximately 30% of the more than US$6 billion that YouTube delivered to music rights holders in the year through the end of June came specifically from UGC (generated content by the user).

Or to put it in simpler terms: YouTube now pays music rights holders somewhere near $2 billion annually in advertising revenue generated by UGC.

It’s food for thought for music labels and publishers when they compare it to the money they’re getting from TikTok and Facebook/Meta, among other “emerging” social platforms.

In a blog announcing the $6 billion milestone published today, Lyor Cohen said, “We want our dual ad and subscription engine to be the industry’s number one revenue contributor by 2025. That’s why YouTube monetizes all music formats (short and long-form video, audio tracks, Live, etc.), on all platforms (desktop, tablet, mobile and TV), in more than 100 countries. overall viewing of music content on YouTube across desktop, tablet, mobile and TV continues to grow year on year.

Cohen further noted that short-form video platform YouTube Shorts now generates 30 billion views per day with 1.5 billion of its own users logged in per month.

He promised that in addition to a $100 million fund for creators, YouTube is “creating long-term monetization solutions for short films, and we’ll have more to share about that soon.”

Commenting on YouTube’s $6 billion payment milestone, Michael Nash, Executive Vice President of Digital Strategy at Universal Music Group, said, “YouTube continues to be a music discovery powerhouse, delivering a comprehensive journey through content formats for fans of our artists.

“UMG is proud of the partnership we’ve built together, which has led to an exponential increase in payments to recording artists, songwriters, labels and the entire music ecosystem.”

Mike O’Neill, President and CEO, BMI, added, “We applaud YouTube’s focus on music, which has increased royalties for the creators of that music. BMI and YouTube have a long history of working together in many ways to help BMI creators use the YouTube platform to promote their craft and maximize their exposure.

“YouTube has contributed to BMI’s record revenue and royalty distribution over the past year, and we are excited to continue to strengthen our partnership for the benefit of our music creators and copyright owners. “

And Annabella Coldrick, Managing Director of the Music Managers Forum, said: “This significant increase in payments from YouTube to the music industry as a whole is very positive news for artists and songwriters in this challenging time. economic uncertainty and rising touring costs.

“MMF greatly appreciates the constructive relationship we have with YouTube Music and the ongoing investment they have made in developing the skills and talents of the UK management community. This support has directly contributed to the success of new artists whose music is reaching new heights in the UK and around the world.

Lyor Cohen added, “I couldn’t be prouder of YouTube’s progress in generating revenue for the music industry,” said Lyor Cohen, Global Head of Music at YouTube. “We remain focused on becoming the number one revenue contributor for the industry while creating a connected music experience across all music formats for fans and artists that enables discovery, consumption and participation.”

Noah Assad, CEO of Rimas Music (responsible for Bad Bunny), said: “Not only is YouTube a major contributor of revenue to the music industry, it is also an essential platform for the development of artists. , independent music and music promotion.

“I’ve seen firsthand how artists benefit from YouTube’s multi-format potential. From music video premieres to live streams, short films and more. The platform is constantly evolving, working to build artists’ careers and helps them reach music fans around the world with lasting results. Youtube is where community and culture connect.

And Danny Rukasin, co-founder/artist director, Best Friends Music (responsible for Billie Eilish), commented: “We’ve collaborated with our YouTube friends on music campaigns and launches across our entire roster, and we enjoyed every moment. Their team’s commitment to the creative process, music discovery, and support for all artists comes through connecting and driving fandom and consistency to achieve new ratings milestones.

“A direct example of this support for developing artists early in their careers is their ‘Foundry Program’ and its recently launched Class of 2022, which we are proud to have a client of. As an artist management company, we are very excited about their growth in monetization for the community of artists and creators who work incredibly hard on their art.

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