What is the biggest music streaming platform on the planet? If you guessed YouTube, you’re right. Mega right.
The platform’s global head of music, Lyor Cohen, confirmed today (November 17) through a blog post that more than 2 billion connected YouTube users now listen to music on the platform every month.
To put that into context, that’s more than six times the 320 million monthly active users (MAUs) who pressed to play a track on Spotify in Q3.
Additionally, YouTube also revealed today, “More than 50% of connected viewers who consume music content in a day consume more than 10 minutes of music content (as of June 2020).”
Clearly, this suggests that said connected viewers are consuming more than one track via YouTube during their listening/watching sessions.
Music rights holders, of course, will want to see how this vastness of listening behavior correlates with the amount of advertising dollars paid to labels, artists, publishers and songwriters.
For a long time, this question has led music rights holders to cringe over the so-called “value gap” between the amount of music consumed on YouTube and the dollar amount paid to the music industry as a result.
YouTube today announced some positive news about it, with the launch of audio advertising on its platform for the first time.
YouTube explains, “Audio ads are characterized by creatives where the soundtrack plays the primary role in delivering your message. The visual component is usually a still image or simple animation.”
Audio ads will never become the majority of business on YouTube: the platform further confirmed today that 85% of music listening on its platform takes place in the “foreground” of users’ devices, suggesting that only 15% of music listening occurs when the user is not watching a video.
For a platform that generated more than $5 billion in total advertising in the third quarter, however, this is a significant launch for YouTube and its music business partners.
Additionally, YouTube is launching “Dynamic Music Lineups”, which gives advertisers the ability to target audiences based on “dedicated groups of music-focused channels in popular genres such as Latin music, K-pop, hip hop and Top 100as well as moods or interests like fitness”.
Speaking to MBW this week, Cohen joked, “I understand tension makes for great headlines in the music business, but this is positive news for everyone.”
He felt that for a long time the record label world had been “subscription drunk” as it was a “very successful part of [labels and publishers’] Business”.
However, Cohen said he’s recently noticed growing industry enthusiasm for YouTube’s “dual engine growth story” through “diversified revenue” from ads and subscriptions.
Cohen effusively outlined the possibilities for music-related ads on YouTube in the future, encouraging major music rights holders to “get together with [YouTube] and go plant Madison Avenue together”.
“Who wants to get on a single-engine plane?” He asked.
In his blog post today, Cohen continues on this themewriting, “When I talk to people in the industry, I know there are often misconceptions about how people interact with music and the ability of music content to drive results.
“In all my years in the business, I can tell you this: music moves and shapes culture, communities and people. For advertisers, this is a reliable, untapped way to capture an audience that is interested in videos they really like. »
YouTube’s subscription “engine” shouldn’t be forgotten, of course: last month, YouTube parent Alphabet revealed that the platform (in tandem with YouTube Premium) now has more than 30 million subscribers. subscribers worldwide.
Of course, those 30 million subscribers represent a small percentage of YouTube’s 2 billion connected music viewers (1.5% or less).
Still, whether or not YouTube is making the right amount of money for subscribers, it’s definitely making a ground of this one: in the year 2019, remember, YouTube says it paid out $3 billion to music rights holders, which appears to make it the world’s second largest streaming contributor (after Spotify) to the coffers of labels and publishers.
Today (17 November), research firm Midia provided some more color on that score in a new report, estimating that YouTube generated some $2.2 billion in royalties for music rights holders thanks to its advertising activity in 2019.
The report adds: “Despite the loss of overall revenue share [in 2019], music retains its role as YouTube’s biggest revenue earner, remaining the biggest ad revenue earner since 2017, far ahead of games at $2.6 billion. Music-related videos also accounted for 32% of all views in 2019.”
Midia founder Mark Mulligan written in the reportt: “The amount of revenue YouTube pays the music industry isn’t the issue; instead, it’s the price per stream.
By the way, another potential facet of YouTube’s advertiser sell-off emerged today: the platform revealed today that YouTube viewing time on TV screens of live-recorded musical performances has jumped more than 100% from July 2019 to July 2020.The music industry around the world