YouTube Notes That Free Music, With Ads, Pays As Well, If Not Better, Than Paid

from the those-digital-dimes-add-up dept

Thu, Feb 3rd 2011 3:18pm — Mike Masnick

One of the more frustrating things about watching people declare certain things as "fact" in the tech world is the failure to recognize the rate of change and trends as they go. For example, for years, people dismissed the idea that music on YouTube could effectively be monetized if it was available for "free." And yet, now YouTube is noting that free music can actually pay just as well as paid music services, and the trend certainly suggests that the money from the free music on YouTube is growing much faster in its earning potential than any paid service. Of course, how long will it take for the major record labels to recognize this. Warner Music has already declared that it won't do any more free streaming deals. On top of that, the rumors about both Spotify and Google Music in the US have all been about how the labels don't want to allow much free music to be offered. How many times does it need to be explained to record label execs that "free" does not necessarily mean "no money," and when done correctly, it can actually mean "more money."

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Filed Under: business models, economics, free, music, streaming, youtube

26 Comments

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Anonymous Coward, 3 Feb 2011 @ 3:27pm

Notice the difference between can and does. Another sneaky difference in meaning.
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Anonymous Coward, 3 Feb 2011 @ 3:30pm

Re:
Oh no! Business has risk and uncertainy! However will we survive!
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sehlat (profile), 3 Feb 2011 @ 3:34pm

Waste of time and annoys the pig.
Explaining good modern business models to record and movie execs is like trying to teach a pig to sing.
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Anonymous Coward, 3 Feb 2011 @ 3:35pm

Re:
How is it sneaky? 'can result in more money'= earning power is there for those who have the ability to tap into it. Which is the point mike's trying to make.
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The eejit (profile), 3 Feb 2011 @ 3:39pm

Re: Waste of time and annoys the pig.
No, explaining good modern business models to record and movie execs is akin to tapdancing on a bed of nails wearing Speedos whilst having Glenn Beck ejaculating his verbal diatribes vis loudspeaker.
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Anonymous Coward, 3 Feb 2011 @ 3:43pm

Re: Re:
It can also result in horrible plagues. It can, it doesn't mean it will.
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Anonymous Coward, 3 Feb 2011 @ 3:49pm

Re: Re: Re:
No, it cannot result in horrible plagues, you're just lying.
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Anonymous Coward, 3 Feb 2011 @ 3:52pm

You obviously didn't read the article.
"Google�s YouTube � itself a major repository of recorded music � claims that giving away music for free generates as much money for copyright holders as charging for it, with profound implications for freemium digital music services such as Spotify and the much-rumored Google music service."
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Colin, 3 Feb 2011 @ 4:07pm

Re: Re: Waste of time and annoys the pig.
If you could never use "Glenn Beck" and any form of "ejaculate" in the same sentence ever, ever, ever again, that would be great.
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Hephaestus (profile), 3 Feb 2011 @ 4:09pm

Re: Re:
"Business has risk and uncertainy! However will we survive!"

You forget there is a difference between a monopoly and a business. Monopolies do not do well when competition occurs. They don't know how to adapt or compete.

The record labels are like flies in amber. They have created a system over the past 100 years that prevents competition and allows for their monopoly. Between the laws they have lobbied for, collection societies, contracts with artists, laws in other countries, distribution deals, and management, it does not allow for flexibility on their part.

They can not change because their are to many players, and to many rules, pulling in to many directions. Which is why they will fail.
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Anonymous Coward, 3 Feb 2011 @ 4:10pm

Re: Re: Re:
"just becuase it can make more money doesn't mean it will" also applies to selling the songs instead of using the free model. See, that's kind of how business works. Risk/reward and all that.
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Anonymous Coward, 3 Feb 2011 @ 4:14pm

Re: Re: Re: Re:
You never know, it could.

Perhaps we can take this article for all it is worth, Google is trying very hard to make a case for it's desires to have all the world's information in one place, without copyright, because they can't make money if they actually have to be responsible and check for permission to use.
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Hephaestus (profile), 3 Feb 2011 @ 4:15pm

Re: Re: Re: Re:
In the time of the pharohs after the 7th plague was released on Egypt God held one in reserve ... the plague of RIAA laywers.

So he wasn't lying :D
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Josef Anvil (profile), 3 Feb 2011 @ 4:17pm

Re:
Free music CAN pay just as much. Yeah it's not the same as DOES. My broadband CAN go UP TO 20Mb/ sec. Imagine that, dodgy language from a service provider. Sneaky.
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Anonymous Coward, 3 Feb 2011 @ 4:26pm

Going free is like going to The House On Haunted Hill for the not so entertaining industry.
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Anonymous Coward, 3 Feb 2011 @ 5:02pm

Re: Re: Re: Re: Re:
Free Content = Potential Plague

Nothing hyperbolic about that.
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Justin Olbrantz (Quantam), 3 Feb 2011 @ 5:09pm

Re:
Exactly right. Just like an album published by one of the big 4 in the 80s can make you rich, but more likely you're going to be working at McDonalds during the day.
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Anonymous Coward, 3 Feb 2011 @ 6:11pm

Re: Re: Re: Re:
Well when it works is great some unknown people are making north of 200K/month on Youtube alone.

Youtube should provide some anonymized data on how many millionaires they produced already.
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Anonymous Coward, 3 Feb 2011 @ 7:12pm

Re: Re: Re: Re: Re:
better than that, they should publish how much is made per average video. I suspect when people realize it's something like 10 cents, they won't bother.
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Anonymous Coward, 3 Feb 2011 @ 7:54pm

Re: Re: Re: Re: Re: Re:
Did you know the average American makes less than 1 penny making music!?
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Anonymous Coward, 3 Feb 2011 @ 8:17pm

Re: Re: Re: Waste of time and annoys the pig.
*goes to rule 34 glenn beck*
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Anonymous Coward, 3 Feb 2011 @ 10:09pm

Re: Re: Re: Re: Re: Re:
Not intended. The concept is that it can make more money. It can also make coffee, mow your lawn, and cure the common cold. It isn't a question of "can", it is a question of "does it"? The answer is no. What Google is putting out there is for their own benefit, and not for anyone else.

Consider:

YouTube can make as much money for labels as paid services, following a massive, 200-to-300 percent increase in the revenue it generates for copyright holders over the past year.

What Youtube/Google doesn't talk about is how they pretty much had to be put at gunpoint to sign distribution deals, the ones they tried very hard to avoid.

They are also doing it by piling on the ads, heavily. Where they can get away with it, Youtube displays ads over video, and sometimes even pre-rolls ads before a video.

Further, they are attempting to end around the whole copyright issue by promoting use of their embedded videos with adwords on them. Short term, it may be a money maker, but more and more ads just drives people to pirate sites rather than youtube.

What it "can" do and what it "will" do is two completely different things.
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Anonymous Coward, 4 Feb 2011 @ 4:31am

Re: Re: Re: Re: Re: Re: Re:
Gunpoint? You mean like record labels who won't even put content on Youtube?

Youtube already makes money. It doesn't generate plagues or coffee. It has the potential to generate more money, but industry supporters would rather have less money and the illusion of control.

Can anyone seriously believe it's the ads on youtube that drive people to piracy?
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Ted Burner, 4 Feb 2011 @ 6:18am

Tell me who are the people making money with free music
I don�t see how free music can be beneficial to any company unless you are a mega ad company. Now, if I was a musician and I get 0.05 cents anytime someone listens to my music on the internet, then I would say streaming my music on the internet is very beneficial.
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TAM, 4 Feb 2011 @ 7:17am

Quick, cut to the commericals!!!
Shut that man up!! SHUT HIM UP!!
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Hardik Upadhyay (profile), 14 Feb 2011 @ 11:44pm

Remember one thing - YouTube is part of Google
I am not able to understand one thing. Why everyday people debate on one thing. Making one or the other product of google as the paid version.

But guys.. remember one thing, Google is built on the advertising payment model and it has lot of sources to generate revenue.

If at all they want to monetize any of its product, they will bundle it with lot of other products. Eg. Google Apps
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