YouTube has come under increasing fire of late owing to the minuscule payouts which it has been providing to artists and labels, far less than other music streaming services such as Spotify and Apple Music. Unfortunately, YouTube's powerful position in the industry makes this a tough financial nut to crack.
Guest Post by Bobby Owsinski on Music 3.0
Many fingers are being pointed at YouTube for not contributing much to label and artist bank accounts despite the enormous number of streams it generates.
For instance, YouTube claims that it had 50% of the 317 billion streams last year, yet paid only a fraction of what the paid tier from Spotify paid.
How much? We don't have the exact breakouts, but a combination of YouTube, Soundcloud, and all the ad-supported tiers from all streaming services accounted for $385 million in the U.S. in 2015.
Premium tiers of Spotify, Apple Music, Google Play and others amounted to $1.22 billion last year.
While everyone is disgruntled with YouTube for paying such low rates, its response as been that it's paid out over $3 billion dollars to the music industry, which is deceiving in that it's over the services lifetime, not last year.
The fact of the matter is that YouTube is still the go-to service by most people to listen to music, yet it pays the least to artists, songwriters, labels and publishers.
Yet the company has the music industry over a barrel as it holds all the leverage. Whether an artist wants their music there or not, chances are some fan is going to upload it, so it's always going to be available, and the price is still right at free.
Unfortunately, don't expect this dynamic to change soon.