MIDiA takes a deep dive into YouTube as a music business

MIDiA YouTube report 2016

MIDiA Research has released a report on YouTube and the video platform’s impact on the music economy. With YouTube commanding a massive audience, but still drawing criticism and skepticism from artists and labels, the report adds much-needed data to explain the service’s role.

“Safe Harbour-enabled UGC is no longer the threat it once was, with just 2% of music video views from unofficial uploads,” MIDiA Research says. That statement, backed by research detailed in the report, is an interesting contradiction of some rights-holder complaints that UGC (user-generated content), and the regulation surrounding UGC platforms, do not adequately protect artists, labels, and songwriters.

The report examines several facets of YouTube’s business, including details about the most popular videos and distinct trends in listener behaviors. It revealed that three-quarters of music video views happen through official sources, and a further 76% of those are uploads from distributor Vevo. It also found that audience behaviors are quite sophisticated, with sizable listener groups only listening to the audio or navigating directly to an artist’s channel.

Most relevant for RAIN readers, the report also discusses the role of Content ID and YouTube’s rights payments, which have been a hotly contested topic for the music industry. The Google-owned platform has made $3 billion in music industry payments since its inception, but the growth trends for payments and number of streams don’t align. Rights payments rose 11% in 2015, even as the number of streams surged 132%. The business model for YouTube and Vevo, where rights holders receive a share of revenue rather than a per-stream payment, is different than most subscription or ad-supported streaming services.

It also detailed the uphill battle music faces within YouTube’s monetization structures. Most tracks aren’t designed to support in-stream ads, and the ad products that are a better match for the content don’t yield as much revenue. And while Content ID is successful in catching infringements, it doesn’t have as big an impact on the bottom line for artists or labels.

Anna Washenko