Music labels discover power of online videos
The removal of Warner Music Group’s videos from YouTube over the weekend highlights the growing tension between music labels and websites over what is becoming an important source of revenue for the beleaguered recorded-music industry: advertising and licensing fees from music videos, the foundation that built MTV but which has now largely migrated to the Internet. The impasse comes at a time when all four major labels — Warner, Universal Music Group, Sony BMG Music Entertainment and EMI Music — are renegotiating their licensing deals with YouTube, the largest video site.
YouTube and social networks such as Last.FM pay for the rights to stream music videos. Typical licensing agreements pay either a minimum fee based on the number of times a video is viewed or, if the sum is greater, a share of the ad revenue, helping to make music videos a small but fast-growing source of revenue for the labels. One label executive estimates that music videos will generate about $300 million for the industry this year. Record labels are eager to explore ancillary revenue to help offset free-falling CD sales. This year’s album sales are down 45% from 2000, according to Nielsen SoundScan. A recent Forrester Research report projects that disc sales will continue to decline by an annual rate of about 9% over the next five years, as retailers reduce the shelf space allotted to CDs and music fans shift their purchases online. Music videos are just one of myriad ways in which the music companies slice and dice a music single, from 99-cent downloads on iTunes to mobile-phone ring tones.
Source: LA Times
Comments(12)
oops, wrong section
Hoooooly cow… these guys are getting good. They catch on pretty fast. I think if they were any smarter their heads would explode.
@2
This study from November 2007 shows that declining CD sales are nothing to do with piracy.
http://torrentfreak.com/piracy-boosts-cd-sales-071103/
University of London researchers, Birgitte Andersen and Marion Frenz surveyed a large group of Canadians to find out what the effect of piracy is on music sales. The results are surprising, at least, for the music industry.
The researchers conclude that that people who download more music actually buy more CDs. They report: “We estimate that the effect of one additional P2P download per month is to increase music purchasing by 0.44 CDs per year.”
This basically means that if someone downloads 270 songs a year via BitTorrent, he or she will buy 9 CDs more than someone who only downloads 27 songs. So, in a way illegal downloads actually convert into more CD sales.
Overall the researchers found no difference between pirates and other people in the number of CDs they buy. They did not find a positive or a negative relationship between filesharing and CD sales. So, at worst, filesharing isn’t the cause for a drop in CD sales. It might even be a boon to it.
This study once again confirms that piracy is not as bad as the recording industry content “owners” want us to believe. Filesharing gives people the opportunity to discover new music for free. It makes it easier to try new music before you buy. Right now, downloading songs off P2P networks is pretty much the only way to listen to complete tracks before deciding to buy them.
the denial of a collecting company is the biggest crime of the bosses of MTV, Sony, Universal, BMG, Polydor and all the other thieves.
the type of payment works on radio and tv. evil terrorists from the named companies deny the same rights to you the customer. the french attempt of a flatrate was killed everywhere.
time to kill the companies!
hell i remember when Video were considered Advertizing and TOTALLY written off by record labels as such. Would be funny if the Big 4 were still writing off Video as advertizing and getting a tax credit for it and yet charging for its use????
record companies are the man behind the curtain of the 21st century… i think they are getting so offenceive is only because they feel like they are going to be caught soon…
Why do they always mention the decrease in CD sales while failing to mention the huge increases in online digital file sales? It’s like mentioning how few LP’s, cassettes or 8-tracks are sold these days. Outdated, over-priced technology doesn’t sell, especially when there are better alternatives.
I save the money buying CDs and spend it on hookers.
new world order…
If i was youtube, i let me pay to advertise their songs on my site.
Best case scenario:
You’ll buy hugely overpriced CD with 1 good and 1-2 bearable songs. Rest are crappy fillers.
Worst case scenario:
You’ll buy hugely overprices CD with 1 bearable song. Rest are crappy fillers.
In both cases, the artist (and customer) are xxxed.
Reason for declining CD sales? You’ll decide yourself!
Kerchoonz is set to be a good way to legally stream music, and the artists get paid whenever somebody listens to their tracks on the site! If people use it, then the music industry is far fairer and under pressure to act now.
As for youtube, if you upload any videos with copyrighted audio contents, you will receive an E-mail telling you that you are using copyrighted material however your video will will be accepted under some conditions.
Quote
If the rights owner specifies a Track policy, the video will continue to be made available on YouTube and the rights owner will receive information about the video, such as how many views it receives. For a Monetize policy, the video will continue to be available on YouTube and ads will appear in conjunction with the video.
So I guess the major compagnies are already doing some good money youtube out of advertising.