Business Matters: If Big Radio Had Pandora's Royalty Rate, It Would Owe Billions
Business Matters: If Big Radio Had Pandora's Royalty Rate, It Would Owe Billions

Small numbers can tell a big story. Take Psy's "Gangnam Style," for example. His video has been watched about 501 million times on YouTube since being uploaded on July 15. The video is now No. 4 on YouTube's list of most-viewed videos behind Justin Bieber's "Baby," Jennifer Lopez's "On the Flood" and Eminem's "Love the Way You Lie."

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Momentum has picked up recently. Over the last five weeks, "Gangnam Style" has been viewed 284.5 million times, according to Next Big Sound. That works out to roughly 0.16% of all YouTube views during that five-week period, according to my very rough math. I divided 284.5 million by 175 billion. I calculated that by taking a reported figure for YouTube's daily traffic in January and used its growth rate over the previous eight months.

It might not seem like 0.16% of YouTube's traffic is much, but it's actually quite impressive. YouTube is localized in 43 countries and across 60 languages. It's a standard platform for watching news clips, sports clips, music videos and a variety of videos around the world. Given the incredible volume on YouTube and the many uses for the platform, 0.16% is an achievement.

On a side note, the Visible Measures blog explains that the "Gangnam Style" video has actually been seen 1.2 billion times (as of Oct. 11) when related videos are counted.

The market share gets better -- although arguably less impressive -- with digital sales. "Gangnam Style" has been purchased 1.27 million times in five weeks of release in the U.S., according to Nielsen SoundScan. The track accounts for 1.1% of all track downloads over that five-week span. If not for a relatively slow first week, that number would be higher. In a typical week, 12 to 13 out of every 1,000 tracks purchased in the U.S. -- or somewhere between 1.2% and 1.3% of all track sales -- has been "Gangnam Style."

Those are still pretty incredible numbers if you think about it. Tens of millions of consumers with the ability to buy an equal number of tracks, and they're buying a track with few English lyrics. A memorable video goes a long way.

Big fractions still exist. Taylor Swift's upcoming album, "Red," is likely to sell about one out of every six albums sold next week.

But today's music industry is about eking out a living through small numbers. Per-stream royalties are small. Shares of worldwide streaming markets are infinitesimal. YouTube will stream more than 1 trillion videos this year. A label will hope to get its fraction of that trillion and convert it into something meaningful.

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