YouTube chases down Spotify

What you'll learn in this post:
  • YouTube wants to become the most important source of income for musicians and is already on Spotify's heels
  • A large part of this is due to the Content ID
  • In terms of their revenues, however, they could still pay out considerably more to the musicians

YouTube has recently announced that they have paid over 4 billion dollars to the music industry in the past 12 months. For comparison: In 2020, Spotify paid their artists, labels, and distributors around 5 billion dollars. So, while many speak of a two-horse race between Spotify and Apple Music, YouTube is getting on the fast lane, determined to become the leading revenue generator for the music industry.

Content ID as an important source of revenue – but not only

YouTube pays out revenues from all kinds of different sources. These include the subscription revenues from YouTube Music and YouTube Premium, ad-based revenues such as Art Tracks, as well as the revenues from User-Generated-Content (UGC), which are managed via Content ID. UGCs make up 30% of the payouts, which is 1.2 billion to be concrete. Up until recently, this share used to be as high as 50%, which really goes to show a strong increase in paying users.

What also contributed to these 4 billion are the payouts to the copyright collectives as well as the offers in which the fan pays the artist directly, e.g., through the purchase of merch, memberships, or tickets for virtual events. With the combination of video and audio, YouTube is significantly more versatile in this regard than many of their competitors.

YouTube Music grows faster than the competition

They further announced that YouTube Music is the fastest growing streaming provider at the moment. In the first quarter of 2021, more new users signed up for the service than ever before. However, they did not mention any specific numbers, and thus, the most recent data we have is from October 2020, when YouTube had more than 30 million subscribers on YouTube Music and YouTube Premium (which includes YouTube Music). For comparison: Spotify has 158 million paying users.

YouTube is often criticised for paying less for both subscription and ad-based streams than Spotify does. Since in 2020 YouTube raked in 19.78 billion through advertisements alone, you might truly wonder whether the payouts should not be significantly higher. The newest numbers, however, clearly underscore that YouTube is a player that the music industry cannot ignore.

With iGroove you can make your music available both to users on YouTube Music and in the form of an Art Track, as well as monetize your songs via the Content ID.