Not so fast, Spotify.
A few months after the Swedish audio streaming company’s CEO Daniel Ek announced Spotify paid $5 billion to the music industry in 2020, rival YouTube’s global head of music Lyor Cohen today said the platform put more than $4 billion in the pockets of artists, songwriters, and rights-holders during the past 12 months.
In a June 2 letter shared with the music industry, Cohen said the money fueling YouTube’s payout came through the dual channels of YouTube ads, and YouTube Music and YouTube Premium subscriptions. The company generated $19.78 billion from advertising during 2020, so its payment to the music industry is about 20 percent its advertising revenue.
The swagger from both companies may be lost on the myriad artists and songwriters who are splitting pennies per stream of their songs.
Stating YouTube’s aim is “to become the leading revenue generator for the music industry and to help artists around the world build a career making music,” Cohen noted the Alphabet-owned company added more paid “members” in Q1 2021 than it has during any quarter since launch.
YouTube paid the music industry $3 billion in 2019, according to the company.
Among its most significant revenue-generators, user-generated content on YouTube accounted for more than 30 percent of the $4 billion it paid to the music industry in the last 12 months, Cohen stated in the letter.
“Fan-powered videos have always flourished on YouTube, helping artists grow their audiences and break songs around the world,” he wrote. “We’re thrilled it’s now also become a meaningful and incremental source of revenue alongside premium music content.”
Cohen pointed out YouTube is continuing to mine new revenue sources, among them innovations in direct-to-fan products including merch, ticketing, memberships and paid virtual events.
Citing BLACKPINK’s paid livestream The Show as an example, he noted the January 31 exclusive to YouTube event sold nearly 280,000 channel memberships across 81 countries and helped the group earn 2.7 million new subscribers to their official artist channel.
Martin Mills, founder and chairman of the Beggars Group, gives a thumbs up to the new report. “YouTube’s growth for the Beggars business over the past couple of years has outpaced everyone as well as the market itself, and is now well on its way to deliver the potential of its huge audience to the music industry, as these revenue figures now show,” he says.
Paul Pacifico, CEO of the Association of Independent Music, comments: “These figures really underline the importance of YouTube’s partnership with music. We know that independent music punches above its weight on YouTube as consumption there is driven by fans. As increasing value is returned to the independent music community from all over the globe, we welcome the increasingly sophisticated tools that are being made available to further enhance the relationships between artists and fans and we look forward to continuing to work closely with the YouTube team to help our members maximize their potential.”