Five Ways to Make Money From YouTube (From the Magazine)

The following story is excerpted from a special feature package from the new issue of Billboard magazine entitled "YouTube entitled "YouTube 3.0: Show Me the Money." With the ever expanding YouTube Economy in 2013 expected to generate $3.6 billion in revenue (according to estimates from Barclays) and major label ad revenue this year more than doubling, there is clearly a lot of money to made from the world's dominant music video platform. Below are some tips on how to increase your share of the pie.


YouTube's Partner Program allows YouTube channel owners to enable monetization on their content, allowing them to earn a portion of the revenue from the ads that run against their videos. But content creators can also monetize in partnership with multichannel networks (MCNs) like Maker Studios, Fullscreen and Machinima that work within the YouTube ecosystem by "signing" quality content creators and then offering services beyond simple channel monetization. By signing to MCNs, musicians, artists, comedians, vloggers (video bloggers) and other YouTube content creators void a portion of their contract with YouTube in order to take advantage of the benefits that the MCN provides. In turn, the MCN uses its pooled subscriber base of the hundreds, sometimes thousands, of artists signed to its network in order to collectively bargain for higher ad rates from YouTube, as well as work to find other lucrative financial opportunities for content creators outside of the platform.

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In an op-ed for Billboard, SONGS Music Publishing CEO Matt Pincus wrote that "there are currently billions of streams of music being watched by millions of people on YouTube, for which songwriters and their music publishers are receiving no money." This is because both YouTube and the MCNs aren't in the business of alerting publishers when they're owed money. Unless publishers do so themselves, songwriters will miss out on money they're owed from ads running against videos that feature their music. Brandon Martinez is co-founder/CEO of Brooklyn-based INDmusic, which works with label partners like Mad Decent and original content programmers like Ahmir "?uestlove" Thompson's Okayplayer to monetize not just the video portion of YouTube, but the publishing and recording rights as well, by helping publishers claim what they're owed from YouTube. It's this knowledge of YouTube's back-end and the nuts and bolts of rights management on the platform that allowed the company to capitalize on Baauer's "Harlem Shake" viral phenomenon. "As a music partner, there's very specific metadata that you need to have in your uploads, which will greatly benefit you," Martinez says. That "specific metadata" is an international standard recording code (ISRC) that computers use to identify the unique sound recording that must be properly claimed through the RIAA, a process that isn't so commonly known.

YouTube 3.0: Are They Paying Enough? (From the Magazine)


Using ISRCs to link to online retailers like iTunes is just one of many ways that the YouTube platform can be used as a tool to promote other lucrative sources of artist revenue. On-screen annotations, playlists and properly tagged metadata help an artist's video find the right fans and keep them engaged. This in turn gives YouTube's algorithm more specific information about who watches the video, which is more valuable to advertisers. Higher engagement also means longer time spent on a video, a stat that now plays an important role in YouTube's algorithm to determine what appears in the "related videos" section, which often creates the highest referral traffic to the other clips on an artist's channel.


In May, YouTube followed Hulu, Netflix and other content providers that offer a subscription-based service by launching a paid plan of its own, allowing channel owners to charge subscribers a monthly fee in order to view content. Content creators who have elected to monetize their channel in this way are free to charge any price above $0.99 per month. To date, most charge $2.99. For the Google-owned content giant, the introduction of paid, subscription-based channels represents a significant departure from the free, ad-supported model that has sustained YouTube thus far. While the paid-subscription option is technically a way one could make money from YouTube, it isn't exactly a revenue avenue that musicians should consider just yet. A paywall creates a barrier to entry for viewers, thereby lowering the probability a casual user will stumble across content, and the preponderance of free music elsewhere will divert a listener's attention.


As the YouTube platform continues to mature, so will its various paths to monetization, and each day there are new companies in the space that continue to push the boundaries of the platform. RightsFlow works with labels, artists and other music services to simplify the often-complicated licensing process, helping creators ensure they're claiming the rights to their videos. INDmusic works with Tubular Labs, a leader in delivering video audience analytics and insights through a real-time dashboard that aims to help YouTube creators better develop their audience. Fullscreen, and other MCNs, work to facilitate lucrative, direct relationships between artists and brands by encouraging creative sponsorship opportunities.

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