Blog Post

Digital Music Royalties Grow; YouTube Becoming A Big Money-Spinner

UK songwriters and music publishers will make another nine percent less money from CD this year, but overall earnings will have grown thanks to online licensing and plays by hairdressers et al…

— The MCPS-PRS royalty collector expects royalties from broadcast and online use of songs to grow 11.6 percent from last year to £173 million for 2008. That still won’t make up for a 13.8 percent fall in royalties from physical formats, to £131 million – but public performance and international revenue will help grow the overall pie 3.5 percent to £582 million.

— Some truly huge figures show how influential digital is becoming compared with tired old music radio – the society is giving songwriters money from 500,000 iTunes plays and 14 million YouTube plays recorded in just the last quarter, against just 12,000 from radio….

— When you consider MCPS-PRS processed 35 million transactions across all categories, it’s clear how important YouTube is becoming to songwriters’ pay packets. MCPS-PRS was first to ratify YouTube last year; it now says the site hosts 10 million videos that contain its members music, of which its systems have recorded over 1.5 billion such plays to date. Still, for its license, YouTube gave MCPS-PRS a flat fee, which we still don’t know so it’s unclear if artists’ income is rising proportionately.

— That big stick is working. Income from hairdressers, who have to pay for tracks played in salons, is up by a quarter, factories up by 43 percent and shops up by 15 percent, after a campaign forcing such premises to face up to their obligations.

— In a sign the collector may be ready to heed the European Commission’s call for harmonisation of such societies across the continent, MCPS-PRS’ briefing note acknowledges “consolidation, alliances and shared infrastructure between music collection societies will be essential to future success. “.

4 Responses to “Digital Music Royalties Grow; YouTube Becoming A Big Money-Spinner”

  1. Tonsotunez

    But Lucas the amount of money advertisers pay is primarily based on the number of listeners their advertisements are likely to reach. If one platform is reaching 500,000 people and the other platform is reaching 5 billion people it stands to reason that the amount of money advertisers would be willing to pay would be substantially higher to the platform that delivers 5 billion impressions than it would be to the platform that delivers a mere 500,000.

    As a real life example a BMI statement that reports 4000 performances on local radio stations across the United States could easily produce $20,000 in royalty payments to writers and publishers… further on down that same BMI statement 4000 internet performances would be lucky to produce $25.00 in payments to the writers and publishers …

    Again, that's because internet performance are one to one while broadcast performances are one to many. Advertisers pay for the number of ears or eyes their advertisements reach.

  2. Tonsotunez

    "– Some truly huge figures show how influential digital is becoming compared with tired old music radio – the society is giving songwriters money from 500,000 iTunes plays and 14 million YouTube plays recorded in just the last quarter, against just 12,000 from radio…."

    Very deceptive … You are comparing apples to oranges … "500.000 PLAYS on iTunes means 500,000 INDIVIDUALS have heard a performance. On the other hand, 1 PLAY on radio in London could easily mean that 1,000,000 INDIVIDUALS simultaneously heard a particular performance.

    Also, the 500,000 iTunes plays probably reflects the global listenership, whereas 1 play on each of thousands of local radio stations around the world could mean billions of people have been exposed to a particular recording. And, of course, multiple local performances of a particular work create memes and build massive communities around a particular song or artist.

    Finally, the so called ‘Long Tail Effect' means massive numbers of titles are now available for listening on the Net, and, as a consequence, the value of each performance is minuscule … In reality, it takes hundreds of performances on the Net to generate a payment of the smallest denomination of currency available.

    Again, the number of PLAYS generated by each media are irrelevant … the number of people that hear a particular play is the number that counts. And that's the number advertising agencies focus upon.