Universal Music: We're getting heaps of cash from YouTube

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universal-music-logo.jpgFor a long time, Google has struggled to monetise its video-sharing site, YouTube. Experiments with advertising have been coldly received by the community but perhaps things are starting to perk up – the executive vice president of Universal Music Group’s eLabs, Rio Caraeff, has said that his company is getting “tens of millions of dollars” from YouTube.

Universal is one of a handful of companies who have a deal with YouTube where ad revenue from Universal’s content is split between the parties. As Universal has a hell of a lot of back-catalogue content, that’s a decent chunk of revenue, but “tens of millions” is far more than I would have expected.

It’s a good sign in an industry that’s free-falling rapidly, but it only serves to further the music-as-water concept that the record companies aren’t too keen on. Also, it’s interesting to compare services like YouTube with traditional radio. Caraeff compares it like this:

“(YouTube) is not like radio, where it’s just promotional. It’s a revenue stream, a commercial business. It’s growing tremendously. It’s up almost 80 percent for us year-over-year in the U.S. in terms of our revenue from this category.”

I’m not sure I agree entirely with that. YouTube still retains immense promotional power. Checking out old Britpop videos, for example, could well lead someone to dig out their old Blur albums and perhaps buy a ticket to their recently-announced reunion tour.

But on the other hand, YouTube is ‘on-demand’ listening. With traditional radio, listeners are just able to pick a vague musical direction from several different stations. The fact that you’re able to pick and choose on YouTube changes matters. The only person who controls the experience is the listener, so they should pay *something* (even if that’s watching an ad) for the experience.

Then of course there’s the tricky middle ground of services like Pandora and Last.fm which give you a personalised radio service, but don’t allow much individual song selection. But that’s a topic for another day.

Universal Music and YouTube (via Cnet)

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Duncan Geere