Wednesday, March 11, 2009

PRS v YouTube round-up: Artists offer their contribution

Perhaps unsurprisingly, artists are getting nervous about the PRS-Google dispute.

Beth Orton has come out in favour of royalties:

"Certain people can’t just make money from gigs, can they?" she told BBC 6music.

She added: "You should get money from recording, because record deals are different now as well, so it would make sense that revenue has to come from somewhere. It's been lovely for me because I've had the last two years to just concentrate on my little girl.

"That's been from working really hard for 10 years and then being able to live off the back of what I've done when those little royalty cheques come in."

Well, yes, and nobody wants to take bread from Beth Orton's children.

But this isn't really anything to do with the falling out between PRS and YouTube - this is about the rate paid for showing videos via the internet. And, from the collection agencies' own account, YouTube doesn't deliver enough money for anyone bar the largest bands to keep body and soul together. And forcing a royalty rate that makes it too expensive for YouTube to feature videos isn't going to do anything to change that.

Billy Bragg also seems slightly confused by the economics of the new music industry, telling Guardian readers:
"Our [the Featured Artists Coalition] target is not the music fan but the businesses that are making huge profits by exploiting artistic content for which they pay little or nothing at all."

The FT was carrying a prediction that YouTube will make USD180million in profits this year. This time last year, there were just under 80 million videos on YouTube, one in five of which were music. The rate of upload suggested a million new videos being added every five days, so roughly we'd be looking at something like 150 million videos by now. So, if we assume that the profits are drawn equally from the various parts of the site, that suggests YouTube makes USD18million in profits from the music videos - or about sixty cents per video. Given that successful videos are viewed millions of times, it's not entirely clear where Bragg has got the idea that anyone is making "huge" profits from. The numbers are large, but not once set in the scale.


Anonymous said...

This is ridiculous, people are just going to illegally download music more than ever

Anonymous said...

Maybe I'm being thick, but if 20% of the videos on YouTube are music videos, and you're assuming that profits are drawn equally from all parts of the site (a *massive* assumption by the way) why are you only ascribing 10% of the predicted profits to music videos?

Surely you should ascribe $36 million to music videos, which would equate to $1.20 per video.

And of course, while it may be mathmatically correct to imply that's how much money is in the pot for each video, a minority of videos will recieve the majority of views, so that amount is in theory for popular artists is likely to be many orders of magnitude larger than the $1.20 figure would suggest.

Am I just missing something obvious or did you get it completely wrong?

SYyd said...

And again with the "I should get paid for doing nothing THIS year, because I did something LAST year" argument!

Actually... it isn't bad. I'm going to ask my boss about it - "Hey boss - I did some work LAST year, so will you pay me THIS year to hang around at home with my kids."

/ Goes to see the boss.

/ Returns

Er... Beth - my boss said "no", but perhaps I could give him your number, and you could have a word?

simon h b said...

@anoymous 9.03

You're right - my maths was out because I managed to divide the profit by ten and not twenty.

Still, $1.20 is peanuts.

Yes, it is based on an assumption, but I don't think an unfair one. In fact, it's arguable that the music video section makes slimmer profits for YouTube, given that there are the additional costs around rights negotiations and management, a lot of the official music videos are unembeddable and thus have less opportunity to make money out in the wild and so on.

Even if you assume that music videos make double the profits for YouTube, you're still talking about an average of $2.40. Still peanuts.

And, yes, some videos are viewed much more frequently than others - which means that a few videos might make a larger sum (there is talk that Coldplay videos might generate a few hundred quid in profits), but that means that, for the vast majority of videos, there is even less to spread around. And that some videos might represent a net loss for YouTube (a loss, you'll note, that no artist is being asked to make good; nor are they offering to share the costs).

Regardless - and even with apologies for my pisspoor division skills - the basic truth remains the same: YouTube is not a massive profit engine. The PRS are looking for money from a system that isn't generating any money.

BaldySlaphead said...

Anonymous from 9:03 here again.

Checking your sources, the only figures I can find suggest that Forbes predicted $200m revenue for 2008 (so your $180m profit prediction cannot possibly be accurate) and £350m in 2009, which provides a rather larger pot to draw from. The FT, whom you quoted, cite $180m for the US ONLY. So, it's 'revenue' not 'profits' and 'US' not 'worldwide'. You're working on such faulty figures that your predications have very little credibility.

YouTube's business model presumes it will not pay for content. Clearly YouTube *should* have to pay for content and needs to adjust its business model to account for the environment in which it actually operates, not where it would like to operate.

James said...

I may have misunderstood something here, but are the PRS expecting payment for each *viewing* of a video? If not, feel free to call me a buffoon. If that is the case though, how would this work with, for example, something like that campaign by Avril Lavigne fans to make 'Girlfriend' the most-viewed video by repeatedly refreshing the page? Could artists really release one song, get it on Youtube and then retire to a life of hitting F5 and watching the royalties roll in?

*awaits chorus of 'Buffoon'*

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