Fresh from parent company Alphabet revealing that YouTube has 20 million premium subscribers and generated $15.15bn of ad revenue in 2019, YouTube has now offered up another stat that’ll be of intense interest to the music industry. “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 CEO Susan Wojcicki in her latest quarterly blog post on the company’s progress.
Avoid the obvious mathematical assumptions: as tempting as it might be to think this means YouTube paid out nearly 20% of its 2019 revenues to the music industry, remember that the $3bn includes ads AND subscriptions, whereas the $15.15bn figure just related to ads. With those 20 million subscribers split between YouTube Music and YouTube Premium, meanwhile, and the music-licensing terms not public, further calculations would be speculative at best.
We can say, though, that YouTube’s 2019 industry payments were a quarter of its lifetime music payouts, as a profile of the company by Billboard last week claimed that “YouTube has now paid out $12 billion to the music business globally to date”. MBW has already published some interesting work on these figures to suggest that YouTube may be running Apple Music close – or have even overtaken it – as our industry’s second biggest digital partner.
Will this prove a soothing balm for the longstanding itch of the ‘value gap debate’. Unlikely: there will be plenty of rightsholders who remember YouTube’s announcement in May 2018 that “more than 1 billion music fans come to YouTube each month to be part of music culture and discover new music”, as well as the study last June claiming that music videos were watched just under two trillion times on YouTube in 2018, representing 20% of total views on the platform – and will continue to believe that YouTube should pay more, and have its safe harbour curbed.
As ever, we’ll offer the nuanced view: it’s possible to appreciate the hard work being put in by the teams within YouTube (and YouTube Music specifically) and capitalise on it for artists, while disagreeing with some or all of its policy positions over safe harbours and copyright reform. Wherever you stand on all this, more transparency about how much YouTube pays out to music rightsholders as well as how much it’s making from its business overall is a good thing.