So we finally have it, official word from the folks at Youtube about how Partners will be affected by the launch of their new subscription platform Music Key. There really doesn’t seem like much to be concerned about. Points to note:
Nothing changes with ad-supported videos. Youtube still gives you 55% of the ad revenue generated by your videos.
Here’s where it got a bit confusing for me. Youtube is saying that it’s going to pay you 55% of net revenue from subscriptions based on your percentage of the total number of views and watch time from subscriber viewed videos. From the horse’s mouth:
[quote_box_center]Subscription Revenues. YouTube will pay you 55% of the total net revenues recognized by YouTube from subscription fees that are attributable to the monthly views or watchtime of your Content as a percentage of the monthly views or watchtime of all or a subset of participating content in the relevant subscription offering (as determined by YouTube). If your Content is included in and viewed by a user in multiple subscription offerings, YouTube will pay you based on the subscription offering with the highest amount of net revenues recognized by YouTube, as calculated by YouTube.[/quote_box_center]
What do they mean? Possibly this:
Hypothetical Example using simple math because I suck at it:
Youtube nets $1000 from subscribers.
There are 1000 views on the platform of which you accounted for 100 resulting in you being responsible for 10% of the total number of views.
10% of $1000 brings you $100 of which you only make 55% leaving you with $55. Is this what they mean? I don’t know, they don’t make it clear. Are they really going to pay 55% of whatever percentage you make from the total net revenue? In comparison, Spotify has a similar structure where they pay artists from a pot of 70% of their revenue, keeping 30% for operating costs, with each artist receiving a percentage of revenue based on their percentage of the total number of streams.
Spotify revenue: $1000
70% of $1000 = $700 To be split among all artists
If you account for 10% of the total number of streams you make $70.
What Youtube is doing makes sense if they’re paying artists a percentage of revenue before deducting operating costs but the use of “Net revenues” makes it seem that that’s not the case. What it looks like is double dipping on the part of Youtube where they’re taking money off the top and then again taking money from the remaining funds in their split with the artist.
What happens if you don’t want your music available to Subscribers?
Youtube explains that if you don’t want to take part in the Subscription option you should make your videos private. Some people have considered this a veiled way of forcing users to take part but I don’t agree. Allowing videos to be available to free users that people who are paying to view videos can’t see completely undermines the service. If you’re a paying customer that equation should be flipped around. If you have users that can’t access videos because they have a subscription, why subscribe? Users can still decide to not monetize their videos and receive income from them which will mean no ads will run on their content but subscribers will still be able to view them.
Is there anything you’d like to know that I missed? Comment below with your questions and I’ll reply with answers.