YouTube Says It Paid Music Industry $3B Last Year, But Didn’t Share The Stat We Really Need Know
YouTube payouts to the music industry topped $3 billion in 2019, according to CEO Susan Wojcicki.
Overall, YouTube says it has paid musicians and the music industry $12 billion since it’s inception. Yearly payments are accelerating thanks to continued growth in both overall users and subscribers at the Google-owned platform.
“YouTube offers twin engines for revenue with advertising and subscribers, paying out more than $3 billion to the music industry last year from ads and subscriptions,” wrote the CEO. “We’re also partnering with artists to support and amplify their work through every phase of their career.”
Is $3 billion enough?
$3 billion and $12 billion are big numbers that global head of music Lyor Cohen can use alongside YouTube’s proven ability to break new artists to lead a music industry charm offensive.
“Why YouTube and the Music Biz Are Getting Along Better Than Ever” blares a recent Billboard headline.
Need more proof of YouTube’s importance to music? A Nielsen analysis showed that artists who upload a video for a song on YouTube see a 40% increase in audio streams across all platforms, including Spotify and Apple Music.
With 2 billion monthly users is $3 billion a fair amount for YouTube to pay for music each year?
Add YouTube’s publically stated 2019 ad revenue of $15.15 billion to its revenue from its 20 million paying global subscribers calculated at a conservative $3 per, and the company generated more than $15.21 billion in total revenue last year.
A $3 billion payment for music represents less than 20% of total 2019 revenue. Compare that to Spotify who is contractually obligated to pay labels and music publishers a combined total of more than 60% of its revenue and YouTube’s 20% appears disingenuous.
But much of YouTube’s revenue is generated by ads that run alongside videos that are not at all music-related.
Back in 2016, before Cohen’s ‘show us some love’ campaign began, a YouTube executive countered music industry claims that 40% of YouTube traffic was music-related, with this:
“Despite the billions of views music generates, the average YouTube user spends just one hour watching music on YouTube a month. Compare that to the 55 hours a month the average Spotify subscriber consumes.”
Other estimates at the time put the percentage of music-related YouTube views in the 5 -12% range
But that number seems very low when you factor in this stat, as of Jan 2020:
93% of the most-watched videos were music videos.
So is YouTube paying musicians and the music industry fairly?
We can’t know until Google shares one more stat.
What percentage of total YouTube views that contain music?