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Did Psy Leave Gangnam Style Money On The Table?

PsyPsy's Gangnam Style music video has gotten everyone's attention and that includes the business press. Passing a billion views on YouTube, music video ads are a revenue center as are music downloads and Psy's commercial endorsements. But despite numerous writers' estimates of what Team Psy has reaped, only recently has GeoRiot pointed to what could be a significant loss of revenue.

At various points, as the Gangnam Style music video gradually headed to one billion views on YouTube, writers have speculated about how much revenue was being produced by the song though little is said regarding concert ticket sales and merchandise.

In September, Nami Kwon, writing for the Australian Financial Review, identified endorsements and advertising as a big revenue center with 7 commercials lined up in the first 2 months at approximately $257,000 each. Various estimates for YouTube ad revenues ranged from $250,000 to 300,000. Corporate appearances suggest possible fees of $25,000 an hour.

Later that month tech figure Jason Calacanis got in on the act and wrote in his newsletter:

"Math is fairly simple, as partners tend to net out at $2 CPMs on YouTube. It is likely that the last 100M views were sold out at a higher CPM as the trend broke out. My guess is: $2 for the first 200k views ($400k), then $8 for the last 100M (another $800k for the last 100M views). Total? $1.2M in revenue -- or $20k a day."

CNET writer Eric Mack also pointed to ad revenue from related videos as well as iTunes sales.

In early December Associated Press writers Youkyung Lee and Ryan Nakashima estimated Gangnam Style would bring in at least $8.1 million for Psy and company.

They focused on video ad revenue, music sales, streaming revenue and tv commercials with the commercials estimated to account for $4.6 million of that total. But iTunes revenue for Team Psy was thought to be as much as $2.6 million, a sizable chunk, some of which would have been made through links that show up below YouTube videos.

GeoRiot took a look at the use of iTunes links on YouTube and found that Team Psy was missing out on a basic source of ecommerce revenue, affiliate links. Since GeoRiot's business is creating and managing geospecific iTunes affiliate links, they looked more specifically at international opportunities as well.

GeoRiot's primary note was that affiliate links were not being used at all meaning that no affiliate revenue was being made. In addition, they found that some countries were not even being served usable iTunes links so the direct revenue from iTunes was being lost in such countries as Korea, Turkey and India which alone counted for over 11% of traffic via the smarturl used on YouTube.

Though no estimates of lost revenue were given, it seems an unfortunate loss for a team that's done a great job with an excessively popular song.


Hypebot Senior Contributor Clyde Smith (Twitter/ blogs about music crowdfunding at Crowdfunding For Musicians (@CrowdfundingM). To suggest topics for Hypebot, contact: clyde(at)fluxresearch(dot)com.