Youtube Licensing: What You're Not Being Told

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Digital distributors offer artists the opportunity to “Get paid when your music is used on YouTube”. They do this through Content ID which is like a digital fingerprint of your music where they scan Youtube for audio that matches that fingerprint. Once they find a match they claim that video contains third-party content owned by them on your behalf. Ads are placed on the video and ad revenue is paid back to the digital distributor who then pays you.

You put out a new song and it takes off sending the Internet into a frenzy. People visit Facebook and Twitter and see that everyone is talking about your song. Youtube users say “hey, there’s a lot of people looking for this song. I want people to see my videos and know my channel exists so I’m going to upload that song to my channel to bring people there. Hopefully after they check out that song they’ll look at some of my other videos and subscribe to my channel.” The content ID system matches the audio of those users videos to your song. The users that uploaded those video are notified that their videos contain third-party content. Ads are placed on the videos and the ad revenue is paid to the digital distributor who then pays you.

It makes sense until you realize that the only person uploading videos to Youtube using your music, is YOU! When that’s the case you find your personal uploads being flagged as containing third-party content owned by you. If this confuses you I’ll explain:

The digital distributor doesn’t own your music but it acts as the owner of your music for the purpose of collecting royalties from Youtube. A standard Youtube account can’t contend ID videos, only premium channels can or labels that have agreements with Youtube concerning their content. Your digital distributor effectively acts as your label collecting on behalf of its artist; you.  Your Youtube channel doesn’t have permission from your label/digital distributor to post uploads of your music to Youtube. As a result it gets flagged as containing third-party content.

Here’s the issue with that, Youtube only pays 35% of ad revenue from videos containing third-party content to the content owner. This matters because publishers collecting directly from Youtube through Adsense receive 55% of ad revenue. To make matters worse, the 35% of ad revenue collected by your digital distributor is subject to whatever percentage they charge for administering your Youtube Licensing. Some distributors will charge 10% some 15% which will take your Youtube revenue from 35% to 20-25%. Digital distributors can White-list your uploads of your music so they aren’t subject to content ID matches but they don’t. If there was so much profit from everyone else uploading your music, why would they feel the need to profit from your uploads?

You may have Youtube users uploading videos containing your music. Even if you don’t, a song could catch fire overnight and people could start to upload videos containing your music. Better safe than sorry right? This still isn’t a reason to opt-in to Youtube Licensing under your digital distributor because there’s a better way. There are what’s called Multi-Channel Netowrks (MCN). MCN’s are kind of like Youtube labels that sign channels. The channels signed to MCN’s become premium channels. Premium channels run premium ads that pay more and some see an ad revenue split as high as 65%. You’d be better served to join one.

Some MCN’s require that a channel average a certain number of views per video and if your channel falls short of their minimum your channel won’t be accepted into their network. Being that I distribute my music through ONErpm I was able to join their Multichannel network as they accept any artist distributing music through them. Before joining any Multi-Channel Network make sure you do your research and thoroughly read through whatever the contract agreement and terms of your partnership are.

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