Music Business

Researchers Claim That Releasing YouTube Music Videos Reduces Album Sales

YouTube_logo_standard_whiteA new report on the relationship of posting videos on YouTube and album sales claims that posting on YouTube reduces album sales. Taking the Warner Music YouTube blackout period in 2009, researchers apply advanced statistical methods to find causation and then total up losses using a "rough back-of-the-envelope calculation." This innovative use of mixed methods leads them to conclude that lots of sales of top-charting albums are being missed by labels who post on YouTube.

Here's the title I should have used for this post:

"Research Reveals That Awesome Free Music Videos For Hit Singles Cuts Down On Top Charting Album Sales"

In a study that reminds us that math is a flexible tool, a correlation is made between posting YouTube videos and reduced album sales.

In 2009, Warner blocked videos on YouTube by not only their artists but by anybody using bits of their music. This period gave researchers a chunk of data to compare and after doing their statistical magic on all other causes, found that the "blackout had both statistically and economically significant positive effects on album sales, specifically the best-selling albums in a week."

The paper is available for free:

"Online Music, Sales Displacement, and Internet Search: Evidence from YouTube"

The key point seems to be that for top-selling albums by artists with which listeners are already familiar, YouTube's free listening acts as direct competition to sales of such albums. In fact, they seem to claim that not having videos on YouTube increased sales by "on average 10,000 units per week for top albums."

How This Report Will Be Misinterpreted

Though this report only focuses on top charting albums, it will be used as evidence that YouTube is bad for all musicians.

The report's claim that YouTube doesn't help publicize albums that everybody already knows about will also be extended to albums that few know about.

In addition, the researchers "rough back-of-the-envelope calculation" (p. 17) will be treated as a fact and quoted without questioning by many in the press.

But there's a basic logic in what the researchers have found even if the calculations of loss are suspect.

Basic Logic Amidst the Flaws

YouTube is a major streaming music service that's monetized primarily by advertising. The researchers leave out that revenue in their calculation of loss which is one of many glaring errors in that calculation.

However the major streaming music service part they got right. That means that YouTube competes with any other source of music whether physical, streaming or downloaded.

So, yes, some people will choose to go to YouTube for the big singles that all get made into visually appealing videos. And they won't buy the album because they have a legal video alternative that's better than an MP3 and cuts out all the filler.

There's some interesting info here but like most such research reports the findings will be misrepresented and the general public as well as the press will continue to interpret things as they wish to see them.

Hypebot Senior Contributor Clyde Smith (@fluxresearch) posts music crowdfunding news @CrowdfundingM. To suggest topics about music tech, DIY music biz or music marketing for Hypebot, contact: clyde(at)fluxresearch(dot)com.

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  1. I believe that what is not being looked at are the multitudes of people who demand high quality music listening, which requires CD’s, a good player and good speakers. iPods are wonderful and downloading a music library is great, however, the compressed music that leaves out what techs think people can’t or don’t want to hear, is a misnomer. YouTube is great, but I prefer to listen to high quality music when I kick back to enjoy a musical journey. This cannot happen on YouTube.

  2. I totally agree. But, I think we are in the minority. Nobody knows what high quality or even decent quality is anymore. And nobody goes on musical journeys. They don’t even listen to whole songs. Just click click click til they pass out or decide to watch zombies.

  3. There is a method to YouTube for indie labels. And it works when worked right! Bad Boy Billy Sly!!

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