YouTube is one of the many ways consumers can enjoy music without having to pay for it but the streaming giant argues it isn’t cannibalising more lucrative channels of music consumption.
The argument goes: if YouTube didn’t exist streamers would access music for free elsewhere, and at least YouTube ads direct some cash back into the pockets of artists.
If music videos were no longer shown on YouTube, around 85 per cent of time currently spent listening to music videos on the platform would be lost or shifted to lower or similar value channels like TV, AM/FM radio and internet radio.
That’s according to a study from RBB Economics, commissioned by YouTube. The findings are published in a report titled ‘Value of YouTube to the music industry – Paper One: Cannibalisation’ which is part of a wider series from RBB Economics to determine if YouTube is good or bad for the music industry.
The study, which looks at exclusive YouTube data and a survey of 6,000 users across Germany, France, Italy and the UK, will examine several aspects of the transformed industry in a series of papers being published over the coming weeks.
The study concluded significant cannibalisation is unlikely.
“The results suggest that if YouTube were no longer able to offer music, time spent listening to pirated content would increase by 29 per cent,” the report states.
The study also found tracks that are blocked on YouTube typically do not perform better on streaming platforms such as Spotify than tracks than remain available on YouTube.
RBB Economics analysed historical data on YouTube views and streams on audio platforms for around 5,000 tracks in the four European countries over a three-year period and found no significant impact on streaming volumes when songs were blocked from YouTube.
In 2016 YouTube paid out over US$1 billion to the music industry from ad revenue alone. And the platform uses a feature called Content ID that allows artists to control their content on the platform, including the ability to make money from fan-uploaded music content.
Thanks to digital disruption the music industry is going to look more and more like the television industry — supported by ads and subscriptions.
“As more advertising dollars shift from TV, radio and print to online services, the music industry will generate even more revenue from ads. In the future, the music business has an opportunity to look a lot like television, where subscriptions and advertising contribute roughly equal amounts of revenue, bolstered by digital and physical sales. To achieve this, there is a lot of work that must be done by YouTube and the industry as a whole, but we are excited to see the momentum,” Robert Kyncl, Chief Business Officer, YouTube wrote in a blog post at the end of last year.