Helping the little guy
Google has been making a lot of noise lately about how YouTube can make as much money for artists and labels as they can by selling their own music. The idea is simple enough and has been working for big artists such as Lady Gaga, who make a small amount of revenue for each ad-supported video play. But when that number stacks up to over a billion views, that's a lot of moolah.
Labels that are using the ad-supported model have seen a 200-300pc increase in revenue in the last year, which Google are putting down to more viewers watching on mobile phones and more profitable ad formats along with online curators that use blogs and social networks to share their tastes.
"If you were to look at the numbers for Lady Gaga, the number of views she gets on YouTube versus downloads that she gets on iTunes, a single download on iTunes will obviously pay her more than a single view on YouTube," said Phil Farhi, a product manager from Google's YouTube monetisation team. "But when you look at the traffic -- the number of people that are coming back and watching her videos over and over again, watching her videos before they download the song, or discovering them on YouTube -- you can see how that scale can compete with a paid service."
While YouTube's larger label partners are making "millions of dollars per month", according to YouTube director of content partnerships Chris Maxcy, what about the little guy -- the songwriters, bands and small labels who are unable to negotiate directly with YouTube and are operating on a much smaller scale?
YouTube currently have a Musicians Wanted Partner Program for independent musicians, which offers a 50/50 split on ad revenue with one of the criterion being that you already have a large audience watching your videos. That's putting the cart before the horse.
A recent graph published by Information Is Beautiful (bit.ly/streamingstats) outlined just how hard that revenue mountain is to climb. For an artist to make the US minimum monthly wage of $1,160 (€855) through online music services, anything from 850,000-1.6 million plays per month is required to hit that target. Totally unrealistic for 99pc of artists. And that's before that figure triples or quadruples if you're a band.
Currently, independent artists are better off trying to sell music and merchandise direct from their website. Use YouTube, Spotify et al for promotion. Sure, sell your music online by investigating the best options for you, but try to offer a unique package with the sale of physical CDs. After all, according to the graph, you only have to sell 143 copies of a self-pressed album at a price of $9.99 (€7.38) to hit minimum wage.
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