Headline

Latest News

How Record Labels and Indie Artists can fix their Youtube woes

As the music industry vs. YouTube battle rages on, Mark Mulligan suggests that the real underlying issue is that the four minute music video, while it worked well for MTV, is no longer fitted to YouTube, and that artists need to begin creating lengthier videos, both to maintain user interest and multiply their ad revenue.

The 4 minute pop video was a product of the MTV broadcast era and still worked well enough when online video was all about short clips. But something has changed, as has short form video (in its new homes Snapchat, Musical.ly and Vine). Short videos are no longer the beating heart of YouTube viewing and quite simply they don’t make the money anymore. This is why music videos represent 30% of YouTube plays but just 12% of YouTube time. If record labels, publishers, performers and songwriters want to make YouTube pay, they need to learn how to play by the rules of Youtube. And to do that they need work out what to do with ‘15’.

The recorded music industry gets radio, and it is beginning to get streaming. Both are all about plays. Each play has, or should have, an intrinsic value. They are models with some degree of predictability. But YouTube does not work that way, which is why the whole per stream comparison thing just does not add up. In MIDiA’s latest report ‘The State Of The YouTube Music Economy’ — revealed that YouTube’s effective per stream rates (that is rights holder revenue divided by streams) halved from $0.0020 in 2014 to $0.0010 in 2015.

Youtube Music Monetization. IMG: Midia Research.
IMG: Midia Research.

There is no way to spin it into a good news story. However, it didn’t fall because of some nefarious Google ploy. It fell because of many complex reasons but the 2 biggest macro causes were:

YouTube pays out as a share of ad revenue (55%) not on a per stream basis. So when the value of its ad inventory goes down (due to factors such as more views coming from emerging markets with weaker ad markets) the revenue per stream goes down too. This is something the labels can do little about, though an increased revenue share will soften the blow as YouTube globalizes.

YouTube serves its in-stream video ads (the most value ad format) on a time-spent basis, not on a per-video basis. The research found that the average number of video ads per hour of viewing comes out at about 4. That means if the artists have 15 minute videos (like many YouTubers do) they’ll get a video ad every play. But if they have 3 or 4 minute pop videos they may only get 1 video ad for every 4 or 5 plays. Which means 4 or 5 times less video ad revenue. The research also revealed that just 26% of music video views have video ads.

The 15 Scale
Right now music video sits in the same 3-4 minute slot it has done so ever since MTV said it wanted videos that length. Yet video consumption is now polarized between the 15 second clip on lip synch apps like Musical.ly and Dubsmash and 15 minute YouTuber clips. Falling in between these two ends is revenue no-mans land.

At the opposite end of the 15 scale labels and artists need to start thinking about what 15 minute formats they can make. Think of this as a blank canvas – the possibilities are limitless. For example:

  • 3 track ‘EP’ videos interspersed with artist narrative and reportage coverage
  • Live sessions (recorded by, and uploaded by labels so they get revenue as well as publishers)
  • Mini-documentaries such as ‘the making of’s
  • On-the-road features

 

Via: ICYMAG. For more details on this topic, please visit Mark Mulligan’s blog HERE.

Join the Conversation