• ABOUT
    • Contact
    • The Team
    • Editorial Calendar
    • Events
    • FAQ
    • Use & Privacy Policy
  • ADVERTISE
  • ROWFAX
  • THE SPORTS CREDENTIAL
  • JOB LISTINGS
MusicRow.com
  • CALENDARS
    • Album Releases
    • Single Releases
    • Industry Events
  • OBITS
  • CHARTS
    • Radio Chart (Current)
    • Radio Chart (Archives)
    • No. 1 Challenge Coin
    • Songwriter Chart (Current)
    • Songwriter Chart (Archives)
  • REVIEWS
  • MY STORY
  • NEWSLETTER
    • Newsletter (Current)
    • Newsletter (Archives)
  • SUBSCRIBE
  • STORE
  • Search
  • Menu

New YouTube Revenue Streams for Publishers

March 27, 2012/in Featured, Publishing /by Eric T. Parker

Since it’s inception in 2005, YouTube has provided a platform for users from around the world to upload audiovisual content. Major labels, with the exception of Warner Music, independently reached agreements to receive compensation for their master recordings with YouTube, but publishers have been unable to establish any formal agreement with the video provider.

As a result, the publishing community, in accordance with the NMPA, set out a longstanding class action lawsuit against YouTube and its owner, Google. In recent months, legal rulings for the suit have favored YouTube over publishers. As the case waits in the U.S. Court of Appeals for the Second Circuit, YouTube has prepared three licensing options for publishers to begin receiving compensation. If a publisher chooses to enter any agreement, they release all pending litigation rights to the class action suit and forgo the ability to benefit from future judgments from those suits.

The licensing process is being facilitated by RightsFlow, a royalty service provider purchased by YouTube in January of this year. Earlier this month, YouTube and RightsFlow representatives held a small conference for independent music publishers at Nashville’s BMI offices to discuss the available licensing options.

Option 1: The first option available for independent publishers is a three-year agreement with the Harry Fox Agency (HFA) under terms negotiated by the NMPA. Under the terms, the HFA charges a 7.5 percent administrative fee from YouTube earnings. Those publishers who opted into the HFA agreement by mid January of this year were subject to share in a $4 million recoupable advance determined by mechanical earnings and market share between 2007-2010. The advance is not a settlement; just a pool paid-forward towards future earnings by YouTube. The HFA has also secured exclusive rights for auditing YouTube’s royalty statements on behalf of its participating publishers. For delinquent payment over 45 days, the HFA has secured a 1.5 percent, per month late provision.

Option 2: Publishers can sign a five-year direct license with the video site. Through this option, publishers evade the third-party HFA administrative fees, but forgo audit rights or the late payment provisions. A publisher also retains direct control with their YouTube online content ID tool. This site manages publishers’ accounts including blocking, monetizing and tracking musical works on YouTube. Under the HFA agreement, the HFA would perform content monitoring on behalf of its clients.

Option 3: Independent publishers can enter Third Party Aggregator agreements. These arrangements enable publishers to collaborate amongst each other to negotiate alternative terms with YouTube. Specific terms of this option have yet to be determined.

The proposals are not retroactive for revenue previously accrued from the site, nor will royalties be based on ‘per view’ rates. Rather, revenues will be based on ad sales within the particular upload as outlined below.

Under the agreements, videos are classified within three categories. 1) Official Commercial Artist Music Videos; royalties typically handled directly between labels and publishers, therefore not included in the agreement. 2) User-Uploaded Videos with Commercial Recordings earn 15 percent of net ad revenue from the video. 3) User-Uploaded Cover Videos can earn 50 percent of net ad revenue.

VEVO President/CEO Rio Caraeff shed light on rarely seen financials for his company in a recent interview. About 35-40 percent of VEVO’s traffic comes from YouTube, which is an outlet for VEVO’s syndicated content. In an effort to provide perspective, Caraeff’s financials surrounding digital video income for his site will be helpful.

“In the last year alone we’ve generated over $150 million,” he explained. “We paid the labels about $100 million over the last two years, specifically to artists, songwriters and content owners. Today we’re seeing 3.5 billion views per month. That’s about 42 billion views per year.”

If you’re calculating a per-view rate on today’s numbers, the average view turns out to earn $0.0012. 100,000 views averages $120.00, and 1 million views, $1,200.00. Granted, YouTube agreements do not propose calculating royalties on a per-view basis. However, for the purposes of this article, it is easy to see how royalties of $100 million spreads thin.

Perhaps the most important aspect of these proposals, as they unfold over the next few months, is that they set out to establish a framework of aqueducts hopeful to carry revenue from digital-age sources to claimants. Time will tell if substantial resources will ever flow.

  • Author
  • Recent Posts
Eric T. Parker
Latest posts by Eric T. Parker (see all)
  • SiriusXM Adds New Channels, Personalization, Expanded Video, Mobile App Upgrades - July 10, 2019
  • Spotify To Close Beta Program That Let Indie Artists Upload Music Directly - July 3, 2019
  • Mark Your Calendar—July 2019 - July 1, 2019
Tags: featured-2
Share this entry
  • Share on Facebook
  • Share on Twitter
  • Share on LinkedIn
  • Share by Mail
https://musicrow.com/wp-content/uploads/2011/11/youtube.jpg 144 250 Eric T. Parker https://musicrow.com/wp-content/uploads/2019/03/MusicRow-header-logo-Mar19B.png Eric T. Parker2012-03-27 15:50:352012-03-27 15:50:35New YouTube Revenue Streams for Publishers
You might also like
DISClaimer (2/12/14)
Former Managers Sue Rascal Flatts
Sugarland Plots 2018 Still The Same Tour
DISClaimer: An Americana Review
Weekly Chart Report (2/17/12)
DISClaimer: Country Embraces Some Unusual Names

RECENT NEWS

  • BREAKING: Country Singer & Actor Mickey Gilley Dead At 86 May 7, 2022
  • Chris Janson Talks New Album, Working With Eric Church, & Investing In Talent [Interview] May 6, 2022
  • Steve Earle Slates Jerry Jeff Walker Tribute Album For May May 6, 2022
  • Aaron Raitiere Delivers Debut Album ‘Single Wide Dreamer’ May 6, 2022
  • Jake Owen Adds Fall Leg To ‘Up There Down Here Tour’ May 6, 2022
  • Bowen Young To Headline Gilda’s Club Annual Songwriter’s Night May 6, 2022
  • Live Nation Q1 Results: Continued Momentum From Return Of Live Events, Tour Sponsorship May 6, 2022
  • DISClaimer Single Reviews: ‘Nashville Treasure’ Sheryl Crow Releases Dreamy Ballad May 6, 2022
  • Beth Nielsen Chapman Shares First Single From Upcoming Album ‘CrazyTown’ May 6, 2022
  • Jameson Rodgers Captures Live Show Rush On New Album May 6, 2022
  • Tim McGraw Trades Truck For MusicRow No. 1 May 6, 2022
  • CRB Settlement Reached To Increase Songwriter Royalties To 12 Cents Per Song May 5, 2022
  • RecordingTheMasters Announces New Wave Of Cassette-Only Reissues May 5, 2022
  • Kane Brown Announces International ‘Drunk Or Dreaming Tour’ May 5, 2022
  • ACM Lifting Lives Announces New Grant Cycle For Mental Health Awareness Month May 5, 2022

Like Us on Facebook

Follow Us on Twitter

Tweets by MusicRow
© 2022 Music Row Enterprises, LLC – All rights reserved.
  • Facebook
  • Twitter
  • Instagram
Scroll to top