The skyrocketing rise in music streaming has tied artist's fate to companies outside of the music industry and far outside of their control, and there may be no clearer example than YouTube payouts.
As the Financial Times reported, although YouTube views overall jumped 132 percent over the last year, to a staggering 751 billion total views, artists and labels have seen only a minor increase in payment received from the streaming giant. In 2015, YouTube paid out $740 million to copyright holders, a small increase over the previous year despite total views more than doubling. Put simply, total views are ballooning, but artist bank accounts aren't.
Before artists get out their pitchforks and torches and begin marching towards Silicon Valley to accuse YouTube of pocketing the money generated from their art, they should know that YouTube barely makes any money itself. In fact, last year YouTube barely broke even.
We tend to focus on the billion view music videos, but YouTube also has to pay to host millions and millions of cat videos only seven people will ever see, the cost of which has often exceeded their successes over the company's history. In addition, last year, and so far this year, has been a down year for online advertising, and since unlike Spotify or Apple Music, YouTube makes essentially all its money off ads, not subscriptions, that means that while people are watching more videos than ever on YouTube, the advertising revenue per video is far less.
Add those two factors together and you can now understand why artists aren't seeing an extra dime despite their content fueling what on the surface seems like a booming business.
It's essentially ridiculous for an artist to have to understand any of this, but welcome to 2016, a time when the rise and fall of online advertising rates can mean the difference between an artist being able to pay their rent or not. My advice is to focus on live shows that still pay and no tech company can take away...until they perfect virtual reality technology.
Maybe those Terminator movies were right, maybe the robots are going to take over the Earth, and we're going to be the ones who made them.
By Nathan S, the managing editor of DJBooth and a hip-hop writer. His beard is awesome. This is his Twitter.
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