The Youtube Guide for the Music Business

YouTube is enormous! The network spans all corners of the earth, is generating healthy revenues, has more people listening to music on it than all other music services combined...and it’s growing exponentially!

Given the scale and multitude of relationships that exist between rightsholders, data distributors, collection organizations, and creators it is obviously very complex. This unique mixture creates incredible opportunities and challenges for all.

To take advantage of the full power of YouTube, one needs a strong foundational understanding of how the music business and YouTube work in addition to the small, yet important, details.

That is why we wrote this guide - to empower one with the building blocks to stay informed.

Check out some of our other guides on music industry topics at Exploration Learn, or subscribe to our YouTube channel for more information.

In this newsletter:

YouTube’s revenue has hit a milestone, surpassing $50 billion over the past year from subscriptions and ads, as revealed by Alphabet and Google CEO Sundar Pichai in Q3 2024.

ASCAP and SACEM are expanding their partnership to invest jointly in data technology, broaden direct collections from streaming services in more countries, and form an AI task force to foster songwriter collaboration.

The number of U.S. jobs supported by music grew 1.9% annually, from 2.17 million in 2017 to 2.54 million in 2020, according to a new RIAA-led report.

Now, the details...

Exploration Weekly - November 1, 2024
Compiled by Ana Berberana

YouTube Ad Revenues Reached $8.92BN in Q3, Up 12.2% YOY

For the first time ever, YouTube’s subscription and advertising revenues have surpassed $50 billion over four quarters. Sundar Pichai, CEO of YouTube parent companies Alphabet and Google, revealed the number on the company’s Q3 2024 earnings call on Tuesday (October 29). “Together, YouTube TV, NFL Sunday Ticket, and YouTube Music Premium are driving subscription growth for the platform,” Pichai told analysts on the call. Alphabet doesn’t typically break out YouTube subscription revenue in its earnings numbers, as that falls within the “Google subscriptions, platforms and devices” category. However, the company does break out YouTube ad revenues, which came in at $8.92 billion in Q3, up 12.2% YoY and beating analysts’ expectations of $8.89 billion, per StreetAccount. Revenue from Google subscriptions, platforms, and devices rose 27.8% YoY to $10.66 billion in the quarter. “We continue to have significant growth in our subscription products, driven primarily by YouTube TV and YouTube Music Premium, as well as Google One, primarily due to increases in the number of paid subscribers,” Alphabet and Google Senior Vice President and Chief Financial Officer Anat Ashkenazi said on the call.

ASCAP and SACEM Announce New Alliance

ASCAP and SACEM are expanding their existing relationship into an alliance that will allow them to invest together in data technology and collect directly from streaming services in more foreign markets, plus launch an AI task force and encourage collaboration among songwriters. Since 2022, SACEM has collected money from online services in foreign markets for ASCAP members that don’t have direct deals in those places, and their respective leaders, ASCAP CEO Elizabeth Matthews and SACEM CEO Cécile Rap-Veber, have become friends. That deal, which is most important in Europe, but also functions in the Middle East and Africa, has been extended. It will also expand into Asia. Collective management organizations began competing to represent online public performing rights for compositions in Europe in the last decade. But this competition is heating up in other parts of the world as well. (The U.S. is among the exceptions, where local societies license online rights as well as traditional rights.) So, ICE (a joint venture hub run by Germany’s GEMA, Sweden’s STIM and the UK’s PRS for Music and SACEM now compete with others for the rights to license repertoire they don’t represent in their home markets. Although many of the markets outside Europe are fairly small, they will be the source of important growth over the course of the next decade.

Music Has a $212 Billion Economic Impact in the U.S., Says New Study

In 2020, the U.S. music business contributed $212 billion to the country’s gross domestic product, up from $180 billion in 2017, according to the latest iteration of a report titled 50 States of Music that integrates data provided by independent record labels, performing rights organizations, independent music venues, music museums and other organizations. The booming music industry has also been good for the labor market. From 2017 to 2020, the number of jobs supported by the music industry grew 1.9% annually from 2.17 million to 2.54 million while overall U.S. employment growth was flat, according to the report’s study from two economists at the firm Secretariat. Direct employment — jobs in the music industry — grew from 1.13 million to 1.32 million over that time, while indirect and induced employment improved from 1.04 million to 1.22 million. Indirect employment includes jobs that result from the goods and services used by direct employment. Induced employment accounts for the jobs created by the additional spending of direct and indirect employees. Fueled by streaming services and a revitalized vinyl market, U.S. wholesale recorded music revenues increased from $5.78 billion to $8.02 billion from 2017 to 2020, according to the IFPI. That growth coincided with an uptick in music businesses. Over that four-year time span, the number of music industry businesses and establishments — spanning brick-and-mortar entities to digital companies — increased from 227,000 to 252,000.

IFPI, IMPALA, GESAC, 20+ European Orgs Call for ‘Meaningful Implementation of the AI Act’

Organizations like GESAC, IMPALA, IFPI, and several others seek the ability for creators and rights holders to enforce their rights when it comes to ingesting and copying copyright-protected works for training by AI models. The open letter is addressed to the European Parliament in support of the AI Act. “The AI Act is a pioneering model of ethical and responsible AI regulation that sets the basis for best practice at global level,” the joint statement begins. “If implemented and applied effectively it will foster an environment in the EU where AI innovation can develop in an ethical and accountable way alongside flourishing cultural and creative industries across the EU.” The EU Artificial Intelligence Act aims to set a global standard for AI regulation, much the same way the GDPR did for consumer data privacy. An artificial intelligence system is defined in the AI Act as any machine-based system that operates autonomously to generate outputs such as predictions, recommendations, or decisions affecting physical or virtual environments. The broad definition chosen was inspired by OECD guidelines and is designed to be future-proof and cover a wide range of technologies, from generative AI, deep learning, and more conventional data analysis techniques. Creator societies and rights holder organizations say they’re dealing with a seriously detrimental situation of generative AI companies taking content without authorization “on an industrial scale.” This open letter states, “Their actions result in illegal commercial gains and unfair competitive advantages for their AI models, services, and products—in violation of European copyright laws.”

Random Ramblings

  • Spotify hails 600% rise in streams for women artists in Poland.
  • Lost Chopin waltz unearthed after almost 200 years.
  • Olivia Rodrigo closes Guts World Tour with nearly $185 Million.
  • Rosé becomes the first solo female K-pop star to top the ARIA Chart.

Who is Exploration?

Exploration is proud to be the company of choice to administer much of the world’s most important media. We rely on advanced technology and a competent, full-time staff of 70+ people to help our clients and partners better control their data and collect their money.

We wrote a free book on how the music business works.

To see who is collecting your royalties, request a free copyright audit.