When it comes to YouTube, the record industry makes more money from fan-made covers, mashups, lip-syncs, and tributes, than from artists’ official music videos. A report by The Sun says ads played before and during fan videos reap more revenue than those played before official clips.
“It’s a massive growth area. We’re very excited about the creativity of consumers using our repertoire and creating their own versions of our videos,” Francis Keeling, the global head of digital business for Universal Music Group, told The Sun. It seems Keeling has every reason to be excited.
With a worldwide user base of one billion, YouTube stands as the single most used music service in the world, beating out giants like iTunes, according to figures detailed in the annual Digital Music Report released Tuesday by the IFPI, who represents 1,300 record companies around the world.
“All record companies make their repertoire available to YouTube,” Keeling said, and this includes fan covers, mashups, lip-syncs, and the like. The Google-owned site tracks uploaded content and alerts record companies when a user has uploaded content that utilises a copyrighted song.
Rather than order the video be taken down for copyright infringement, which often happens with users uploading copyrighted content to YouTube, record companies can instead choose to run ads before and during the user’s video, and subsequently generate revenue from the video’s views.
A video of US comedian Steve Kardynal lip-syncing to Carly Rae Jepsen’s Call Me Maybe for Chatroulette users while dressed in a bikini has amassed nearly 14.5 million views, which earned ad dollars for Interscope, a member of the Universal Music Group, and the label behind Jepsen’s hit.
User-made content is now generating more money for companies than official videos uploaded to official artist and label accounts. “A lot of that is due to consumers putting more and more repertoire and new versions up there, but also it’s YouTube getting better at advertising,” Keeling said.
New formats and an expansion to over 50 countries has increased the amount of revenue generated by ads on YouTube. The question remains though, with labels making money off of content planned, produced, and edited by users, are labels simply cashing in on the creativity of YouTubers?
Watch: Steve Kardynal – Call Me Maybe (Carly Rae Jepsen Cover – Chatroulette Version)