YouTube on track to surpass Spotify as 12-month music payouts rise 50% to $6B
YouTube’s 12-month payouts to the music industry between July 2021 and June 2022 rose to $6 billion, up 50% from the $4 billion it reported in June of 2021.
YouTube says it’s on track to surpass Spotify as the top contributor of music industry revenue by 2025. Spotify reported that it had paid musicians and the industry $7 billion in 2021.
“This significant uplift in payments from YouTube through to the wider music industry is very positive news for artists and songwriters in a time of economic uncertainty and rising touring costs,” said Annabella Coldrick, Chief Executive, Music Managers Forum.
A new investigation by Billboard, however, suggested that YouTube needs to tighten up where their payments are sent. The report included detailed allegations that YouTube’s rights-management system is “full of errors” and “ripe for abuse.”
How YouTube Could Surpass Spotify
YouTube is unique among major music services in using what it calls the “twin engines of ads and subscriptions” to monetize a broader mixture of formats, including recorded music, short and long-form video, and live streams, as well as offering creators the monetization opportunities including tips, merch sales, and subscriptions.
Monetization of user-generated content – another content source virtually ignored by Spotify, Apple Music, and most others – drove more than 30% of payouts to artists, songwriters, and rights-holders, for the second year in a row. YouTube’s TikTok competitor Shorts alone generates 30 billion views per day with 1.5 billion monthly logged-in users.
“YouTube continues to be a powerhouse of music discovery, offering a full-featured journey across content formats for our artists’ fans,” said Michael Nash, EVP of Digital Strategy at UMG,”…(and) that has led to an exponential increase in payouts to recording artists, songwriters, labels and the entire music ecosystem.”
“Building a connected music experience across all music formats is great for fans, but it must also be great for artists. All artists>” said Lyor Cohen, Global Head of Music at YouTube. “Whether they want to be occasionally brilliant or ‘always on,’ it’s our mission to help them forge their own path on YouTube and develop financially sustainable careers.”
Bruce Houghton is Founder and Editor of Hypebot and MusicThinkTank and serves as a Senior Advisor to Bandsintown which acquired both publications in 2019. He is the Founder and President of the Skyline Artists Agency and a professor for the Berklee College Of Music.