YouTube is no longer the villain of music

Let me go back to the years when YouTube was in the doghouse of the music industry. Industry powers regularly drew up a public relations abbreviation, the “value gap,” for what they said was YouTube’s negligible financial contribution to the music industry relative to the popularity of music in the world. the place. They liked to point out figures that showed that vinyl records generated more revenue for the music business than YouTube.

For the most part, YouTube made money for musicians, songwriters, and record labels the Google way: It sold ads in or alongside music-related videos and split the cash with the people and companies behind the songs. Power brokers in the industry said they were peanuts.

Fast forward to last week, when YouTube revealed that it paid music companies, musicians and songwriters more than $ 4 billion in the previous year. That came from ad money and something the industry has always wanted and is now getting: a piece of YouTube’s surprisingly large subscription business. (YouTube subscriptions include an ad-free version of the site and a Spotify-like service for watching ad-free music videos.)

The significance of YouTube’s dollar figure is that it is not far from the $ 5 billion that streaming king Spotify pays to music industry players with a portion of their subscriptions. (A reminder: the industry mostly loves Spotify money, but some musicians they say they are cheated out of payments).

Subscriptions will always be a hobby for YouTube, but the numbers show that even a side gig for the company can be huge. And he has bought peace by raining down some of those riches on those behind the music. Record labels and other industry powers “still don’t love YouTube,” Lucas Shaw, a Bloomberg News reporter, wrote this week. “But they don’t hate it anymore.”

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