Tati Cirisano, music industry expert, joins the podcast to discuss YouTube's impact on the music industry. They explore YouTube's entry into the space, rocky relationships with rights holders, the importance of user-generated content, the monetization-exposure trade-off, improving relationships with the music industry, Content ID, and YouTube's ambition to overtake Spotify. They also discuss the impact of Article 17 on content hosting platforms and explore the paradoxes of Apple, YouTube, and Spotify in the music ecosystem.
YouTube has revolutionized the music industry by providing a platform for artists to gain exposure and lower the barriers of entry.
YouTube's user-generated content (UGC) has played a significant role in shaping the music landscape and helping artists like NBA Youngboy build successful careers.
YouTube is exploring new frontiers in music creation through partnerships with artists, AI advancements, and unique avenues for creativity and engagement.
Deep dives
The Rise of YouTube as a Music Platform
YouTube has revolutionized the music industry by lowering the barriers of entry and providing a platform for artists to gain exposure. From Soulja Boy to Justin Bieber, many artists have utilized YouTube as a launchpad for their careers. However, the relationship between YouTube and major record labels has been tumultuous due to issues of copyright and revenue sharing. Despite this, YouTube has introduced marketing programs and worked towards improving its relationship with the music industry.
The Power of User-Generated Content and Covers
YouTube's user-generated content (UGC) element has been crucial in shaping the music landscape. Artists like NBA Youngboy have leveraged YouTube to build successful careers by creating music videos and engaging directly with their audience. Cover versions of songs have also played a significant role in finding new talent. YouTube's Content ID system, which identifies copyrighted material, has enabled the monetization of UGC and has become a multi-billion dollar business.
AI and the Future of Music Creation on YouTube
With advancements in AI and technology, YouTube is exploring new frontiers in music creation. Partnerships with artists like John Legend and Demi Lovato have led to the development of DreamTrack, where users can remix and incorporate artist vocals into their own tracks. YouTube's focus on AI and music creation sets it apart from other music consumption platforms, providing users with a unique avenue for creativity and engagement.
The Value Gap and YouTube's Revenue
One of the main concerns with YouTube is its revenue breakdown, where ad-supported streaming only contributes 16% of the overall revenue, despite being responsible for half of the music consumption on the platform. This has led to debates and criticisms from the music industry, as they believe YouTube is not adequately compensating music rights holders and is overshadowing the subscription streaming market. Statistic from 2016 even showed that the music industry made more money from vinyl sales than from YouTube. YouTube has tried to address these concerns by publicly disclosing that it contributed $6-7 billion to the music industry in 2022, with a goal of becoming the top revenue generator for the industry.
The Role of Shorts and Competition from TikTok
YouTube's introduction of shorts, its answer to the growing popularity of TikTok, has created an ecosystem where short-form videos can lead viewers to music content. However, there are debates about the success and impact of shorts, as it can shift user time away from traditional YouTube videos and potentially affect ad revenue. TikTok, on the other hand, has its own challenges in terms of generating revenue for the music industry, as platforms like Peloton have been reported to generate more revenue than TikTok. The ongoing discussions around copyright and laws like Article 17 further highlight the complex relationship between technology platforms and the music industry, as they navigate disruption and collaboration.
It’s hard to imagine what music would be like today without YouTube. The platform has done more to lower the entry barriers to music creation and distribution than any other platform.
From the early days when acts like Soulja Boy harnessed the raw power of YouTube to drive their careers, to modern narratives like NBA YoungBoy mastering Creator culture, in this episode we delve into how YouTube's become an essential player in the music industry.
In this episode, I’m joined by Tati Cirisano from MIDiA Research to discuss the origins of YouTube entering the space, the rocky relationships with music rights holders, the importance of UGC (User Generated Content), and so much more.
[00:01:23] YouTube Enters The Music Industry
[00:08:37] Google Acquires YouTube, DMCA
[00:21:12] The Monetization-Exposure Trade Off
[00:28:36] YouTube’s “Value Gap”
[00:44:48] Improving Relationships With The Music Industry
[00:49:49] Content ID
[00:56:44] YouTube and AI
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