Once again, Warner Music has demanded YouTube to pull all music videos by its artists which could include hundreds of thousands of videos clips. Why? Because contract negotiations broke down.
Warner wants a bigger chunk of YouTubes revenue stream.
“The music companies typically get paid a share of any advertising revenue associated with the video and a per-play payment for every video viewed.” The per-play fee is usually a fraction of a penny and with millions visiting YouTube everyday it was all expected to add up to a substantial amount.
A source familiar with Warner Music’s talks said the amounts it has been receiving from YouTube were “staggeringly low”.
Music labels receiving a penny for every click to stream a video is a death bed business model. To illustrate, the label would only make 10,000 dollars after one million video streams from one of their artists.
The return of a labels investment has dropped exponentially from a 10 dollar CD to 99 cent digital track, to less than a penny for a video stream. Where does it end?
As one insider from MTV said after the ratings drop,“We’re finding out that digital isn’t the holy grail that everyone thought.”
Do they have any idea how much money Google is losing on Youtube? They’re probably making out better than anyone on the site & they’re asking for more money.
The fact of the matter is that “digital” is still incredibly young & no one’s done it right yet, save for the iPod. And the folks who should be helping have been fighting it tooth & nail every step of the way. The problem here is that these are gigantic corporations who need a lot to survive… it took television years upon years to become what it was by the early 80’s, which wouldn’t have happened if the people in control were publicly traded companies with demands for quarterly profits. That’s a pretty elementary point. Declaring that “digital isn’t the holy grail that everyone thought” translate loosely to “digital isn’t the life raft our lazy asses hoped it would be, you’ve actually got to put effort into developing new ways to monetize a new platform. Fuck that!” It doesn’t help that no one in charge can tell a megabyte from the hole in their ass.
This “rape & pillage” strategy is going to get them absolutely no where.
Music videos were never supposed to be cash cows on their own, they were always supposed to encourage people to go buy the music. If they a) have millions of eyeballs on their videos who are now potential album customers, and b) are not LOSING money producing the music videos, then I’d say they’re actually doing rather well with it!