A new report from MIDiA Research has revealed that Alphabet Inc (NASDAQ:GOOGL) Google YouTube, LLC is getting increased video views but this is not meaning much to artists. The report places YouTube rights payments at $740 million in 2015, an 11% increase from the previous year. During the same period, total views grew by 132% to a total views of 751 billion. If YouTube’s pay rate had stayed the same in 2015 as a year earlier, payments to right holders would have doubled.
Mark Mulligan, an analyst at MIDiA notes that even if the music industry were able to get a better deal with YouTube, music would never prosper in this environment, and YouTube would probably leave the music industry before it engages in per stream rates.
Cary Sherman, Chairman, and CEO of the Recording Industry Association Of America notes that YouTube can simply help artist by supporting legislation to fix notice-and-takedown or even by implementing policies and practices voluntarily. This would give creators, not only fair compensation but greater control over the monetization of their music.
There are a number of factors that contributes to YouTube’s low payout, but Mulligan encourages people to take a long-term view of their relationship with YouTube rather than trying to engage in in the short term fix. The current rapid rise of an emerging market will result in YouTube paying less for clicks in these markets since they are not considered valuable yet. What artist are focused on is that YouTube is shortchanging the music industry without taking into account that the more global YouTube goes, the less money they will get.
Another important reason why music is struggling on YouTube is the fact that the site pays on a time-watched basis as opposed to per-video basis. This means that a blogger doing a 15 minutes video can have more ads as compared to a 4-minute long video. Mulligan suggests that the music industry needs to adjust to the YouTube environment by creating longer videos that can host more ads.
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