We know some big statistics about YouTube: it attracts 1bn unique users a month, for example, and it has paid out more than $1bn to rightsholders through its Content ID program.

But the great unknown is how many of those billion visitors use YouTube for music, and how intensely or casually they do it. Midia Research consultant Mark Mulligan is releasing a report today that tries to put some hard figures on those questions, based on a survey of 1,000 British consumers.

Topline stats: 44% of people surveyed watch music videos on YouTube: 13% once or twice a month, 10% a few times a month, 14% a few times a week, and 7% every day.

If these percentages were applied to YouTube’s global user base – although remember this was a UK survey, so that’s a big ‘If’ – that could mean there are already 70m people who watch music videos on YouTube every day, and another 140m who watch them a few times a week. That’s a frequent music audience of 210m people: the likely initial target for the company’s long-rumoured ‘Music Key’ subscription service.

Midia also asked people whether they’d pay for a YouTube subscription music service without ads and with extra content. 7% said they would, while 25% said they wouldn’t because they “get all the music they need for free from YouTube” already.

But the most controversial claim in the report is Mulligan’s use of these responses as part of his calculations that YouTube Music Key will generate around $400m of revenues in its first year, but would “be responsible for more than $2.6 billion in lost subscription revenue, meaning its net impact would be around -$2.3 billion”.

“It should prove to be among the most compelling music product offerings in the marketplace, yet YouTube’s net impact on the subscriptions’ sector will still be net negative with its free tier sucking the oxygen from its premium competitors,” suggests Mulligan.

Privately and publicly, those competitors have acknowledged for some time that YouTube is the biggest threat to their businesses, with or without its own subscription service. But watch for the ripples not just from YouTube, but from this particular report: Apple, Spotify and others will be brandishing that -$2.3bn net impact figure in their own negotiations with rightsholders in the months to come.

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Stuart Dredge

Music Ally's Head of Insight

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