YouTube is paying less than £0.0009 per stream to UK record labels

We got good news back in January when we learned that, at a retail level, the UK’s recorded music industry grew 3.5% in 2015.

Today, a reality check: the money which then made its way to labels from sales and streaming actually fell 0.9% in the year to £688m ($1bn), says the BPI.

When performance rights are folded in, total label income did rise by a sliver (0.6%) in 2015 – some positive news, but meager consolation when new startling figures about YouTube are considered.


According to the BPI’s new Music Market 2016 yearbook, 26.9 billion video streams of music (across YouTube and Vevo) were measured by the Official Charts Company in 2015, up 88% on the year before.

Meanwhile, audio streams grew at a slightly slower pace. They were up 82% to 26.6bn streams.

That meant Vevo and YouTube were responsible for more than 50% of all on-demand music streams in the year – up on the 49% these services claimed in 2014.

UKmusicstreams UKvideoandaudio

Here’s the devastating bit.

Despite this 88% rise in YouTube and Vevo plays, money coming into labels from ‘pure ad-supported’ platforms rose by just 4% – up to £24.4m.

It’s very important to qualify this stat.

‘Pure ad-supported’ means platforms which ask no money at no stage from the consumer, so don’t include ‘freemium’ models like Spotify and Deezer.

The only ‘pure ad-supported’ services of any note in the UK market last year were YouTube, Vevo and SoundCloud.

This £24.4m figure is therefore definitely higher than YouTube and Vevo’s combined payout to labels.

In contrast, income from audio streaming services – Spotify, Apple Music, Deezer, TIDAL etc. – was up 69% to £146.1m.

Remember the audio/video streams graph above, in which video took 50.3% of consumption?

Here’s how subsequent payments to labels and their artists were then divided between audio streaming platforms and ‘pure’ ad-funded (YouTube/Vevo/SoundCloud) platforms.

Pureadfunded

Yikes.

Now we arrive at a slightly complex but no less essential way to slice this data (and an explanation for our headline above).

Bear with us.

So we know that YouTube, Vevo and other ‘pure ad-funded’ services paid UK labels and artists just £24.4m in 2015.

Yet video streaming services alone attracted 26.9bn streams in total.

If you divide one by the other, it works out at £0.000907 ($0.00132) per stream.

Bearing in mind that the amount of streams taken into account here is only for video platforms, we can therefore safely say that YouTube (and Vevo) definitely paid UK labels less than an average of £0.000907 per stream last year.


SPOTIFYOn the other hand, we know that Spotify, Apple Music and other audio services paid UK labels and artists £146.1m across 26.6bn streams.

That works out at £0.00549 ($0.008) per stream – slightly higher than Spotify’s previously announced average payout of $0.007 per play.

In simpler terms: audio streaming services are definitely paying UK labels and artists six times more per play than YouTube.

If anything, that probably underplays the difference.

YouTubevsaudioThat £24.4m income from ‘pure ad-supported’ platforms, by the way, made up just 3.5% of UK labels’ total 2015 earnings from sales and streaming.

You may now be able to understand why the BPI is really not very happy about a situation it calls “market distortion”.

Geoff Taylor, BPI & BRIT Awards Chief Executive, explains:

“It is hugely encouraging that demand for British music is so strong at home and abroad thanks to our brilliant artists and the continual innovation and investment of our record labels.

“Yet the fact that sales revenues dipped in a record year for British music shows clearly that something is fundamentally broken in the music market, so that artists and the labels that invest in them no longer benefit fairly from growing demand.

“Instead, dominant tech platforms like YouTube are able to abuse liability protections as royalty havens, dictating terms so they can grab the value from music for themselves, at the expense of artists.

Geoff“In 2015, UK fans streamed almost twice as many music videos as the year before. Yet artists and labels did not benefit from the increased demand. This is wrong.”

Geoff Taylor, BPI

“The long-term consequences of this will be serious, reducing investment in new music, making it difficult for most artists to earn a living, and undermining the growth of more innovative services like Spotify and Apple Music that pay more fairly for the music they use.

“In 2015, UK fans streamed almost twice as many music videos as the year before; tens of billions more views. Yet artists and labels did not benefit from the increased demand for what they created. This is wrong.

“Music is precious – it’s not a commodity to be strip-mined for big data. And as we’ve seen time and again in the digital market, where music goes first, the rest of the content sector will follow. This problem requires urgent action by the EU, and our Government needs to take the lead in making sure it is tackled.”


The BPI’s Music Market 2016 provides an in-depth look at a host of indices and metrics, including analysis of industry income; sales by type of music, genre and nationality; best-selling artists & releases; retailer share and consumer demographics; and many other insights. It is available for £90 from the BPI’s shop or email research@bpi.co.uk.Music Business Worldwide

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