Music Ally

YouTube is on course to generate more than $1.1 billion in revenue by 2011, with Google sharing $397 million of that with content owners – including record labels.

At least, that’s the prediction from Citigroup analyst Mark Mahaney, who’s been crunching numbers based on the revenue-to-page ad revenues at MySpace, applying that ratio to YouTube based on its comScore traffic numbers.

Mahaney thinks YouTube generated $727 million of gross revenues last year, sharing $254 million of it with content owners. The sharing figures are based on 50% of YouTube’s revenue coming from videos where it has a revenue-sharing deal with a partner, who get 70% of those revenues.

We could add an extra layer – although this is about as shonky maths as you get. Recently, analytics firm Sysomos claimed that music videos account for 30.7% of all views on YouTube. If music took a 30.7% share of the $254 million distributed to content owners last year, that’d be just under $78 million…

How big is music for YouTube? Very. But now analytics firm Sysomos has put some figures to it, claiming that music videos account for 30.7% of all views on the site.

That’s more than double the next most popular category, Entertainment, which accounts for 14.6% of all views. The stats may bolster the arguments of those in the music industry who think Google should be more deferential to music rightsholders, given their videos’ importance to YouTube.

Another way of looking at it, though, would be that it’s also renewed proof of YouTube’s importance to the music industry. This is one relationship which, when it’s running smoothly, both sides clearly benefit greatly from.

Last month, there was a big hoo-ha about the way OK Go’s videos were disabled from being embedded anywhere other than YouTube. Now the band is releasing a new video for its latest single, This Too Shall Pass, which WILL be embeddable – thanks to sponsorship from State Farm.

Meanwhile, the band’s Damian Kulash has written an Op-Ed piece for the New York Times, in which he reveals EMI’s decision to block embeds of the band’s hugely popular Here It Goes Again video made daily views drop by 90% from 10,000 to 1,000.

“It needs to recognize the basic mechanics of the Internet,” Kulash says, of EMI. “Curbing the viral spread of videos isn’t benefiting the company’s bottom line, or the music it’s there to support. The sooner record companies realize this, the better — though I fear it may already be too late.”

David Eun was one of Google’s key execs when it came to dealings with the music industry – his MidemNet keynote interview last year famously began with the question ‘Why are you trying to screw the labels?’.

However, Google’s content partnerships boss is now leaving the company to take up a position as president of AOL Media and Studios. He’ll be in charge of the company’s network of content sites.

“David brings an impressive breadth of media experience to AOL at an exciting juncture as AOL forges a new future as a high-scale producer and partner in the content space” says the internal memo from CEO Tim Armstrong.

There might be discussion around the viability of YouTube’s ad-supported business model in the music industry, but the company’s director of video partnerships Patrick Walker tried to dispel them in yesterday’s closing session at MidemNet, where he shared the stage with Spotify’s Daniel Ek.

“Now we’re monetising over a billion videos per week,” said Walker, who also claimed that 75 of the world’s top 100 advertisers ran campaigns on YouTube last year, and that the site signed 500 new partners during 2009.

Walker also said that YouTube is generating CPMs of between £15 and £30 in the UK for pre-roll ads on the site.

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Barclays analyst Douglas Anmuth thinks it could. He reckons the video site’s revenues will rise 55% to $700 million this year, helping it to “start contributing positively” to Google’s bottom line.

Why? It’s all about the advertising – and specifically YouTube’s improvement in making money from its most popular clips.

“An improving advertising environment certainly helps, but with YouTube monetizing more than 1 billion video views every week, and with strong sell-out rates on its home-page from larger advertisers-we note 90% of the top 50 Ad Age have advertised on YouTube-we believe the site can profitably take share of the branded display & video market,” writes Anmuth in a research note.

YouTube’s profitability (or lack of) has been a live issue for the music industry, particularly when YouTube and Google have found themselves in conflict with bodies like PRS for Music and GEMA.

It’s been nearly three years since Viacom announced plans for a $1 billion copyright infringement lawsuit against Google over YouTube, but the intricacies of the case mean it still hasn’t come to trial.

Now it may not, as both sides have filed motions for summary judgement, asking the court to rule in the case without sending it to trial.

Google maintains that YouTube is protected by the Digital Millennium Copyright Act (DMCA), and cites the recent decision in favour of Veoh in its legal battle with UMG.

Meanwhile, Viacom reiterates that Google knew about widespread copyright infringement on YouTube and profited from it, meaning it can’t claim DMCA protection. A resolution could – and we stress the ‘could’ – come sometime this year.

Remember Muziic? It used to be a PC application that let people build music playlists from YouTube videos, but just after Christmas it launched a website version.

One of the key selling points? The ability to also play videos from Vevo anywhere in the world – not just in North America – without seeing the accompanying ads. Vevo was quick to respond, emailing Muziic’s teenage founder David Nelson asking him to stop using Vevo’s content and trademark.

Soon after, Vevo removed its videos from YouTube’s API, ensuring that no third-party website could use them. Muziic is back to relying on pure YouTube videos for its music content, although the company has high hopes for its spin-off Facebook application, as well as the website.

YouTube and Last.fm have published year-end charts showing which artists were the most popular on their services this year.

Susan Boyle on Britain’s Got Talent topped YouTube’s overall chart with more than 120 million views. For pure videos, Pitbull’s I Know You Want Me racked up 82 million views, followed by two Miley Cyrus vids: The Climb (64m) and Party in the U.S.A. (54m).

Meanwhile, Lady GaGa ruled the roost on Last.fm – her album The Fame was scrobbled 18.5 million times, followed by The Killers’ Day & Age (12.5m) and Lily Allen’s It’s Not Me, It’s You (10.5m). The hottest new artists were The xx, Fever Ray and La Roux.

Maybe they should team up in 2010 to take on the world. Hey, remember that MTV Awards when Madonna and Britney… Actually, no. NO.

Gig webcasts have a chequered history, to say the least. Squinting at a grainy postage-stamp sized video window trying to make out Madonna, in between swearing at buffering delays wasn’t many fans’ ideas of fun.

However, with technology having improved rapidly, there’s a new buzz around webcasts at the moment, thanks to the efforts of livestreaming companies like Ustream. Even YouTube is getting into the game with some high-profile gigcasts.

Ustream has been particularly busy, integrating its platform with Facebook to allow artists to both broadcast live and interact with their fans. Shakira debuted the video for her new music video Give It Up To Me using Ustream, and attracted 95,000 unique viewers during its initial ten-minute broadcast, and half a million more in the 24 hours after.

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