YouTube is reportedly coming under fire from major music labels who are upset with the video-sharing platform’s distribution of ad money.
According to a report from the New York Post, the likes of Sony, Universal and Warner have grown frustrated with YouTube users gaining access to their music videos for free, with the amount of advertising revenue generated by the pre-roll ads that play before these videos not being enough to help bolster their profits. Now these labels are allegedly looking to “reset” their current relationship with the site, in order to enhance the amount of ad revenue they receive from their music being played on the platform.
It isn’t known exactly how labels are planning to convince YouTube to increase this ad revenue considering the site utilizes the same payment method for each of its channels, but when you take into account that YouTube Music is the site’s most subscribed channel and Rihanna, Eminem, Katy Perry and Taylor Swift’s Vevo accounts all rank within its top 20, they’ve certainly got some pull when it comes to convincing Google to alter the monotization process for its videos.
Taylor Swift has one of the most subscribed channels on YouTube. (Photo: Getty Images)
With Google having revealed that 40% more advertisers are running videos on the site compared to a year ago, and with the average spend per advertiser being 60% higher year-over-year, it’s certainly valid for video creators to want a bigger piece of ad revenue pie in return. However, whereas individual channels and content creators would struggle to force Google’s hand, major music labels have enough of a presence of the site to really change the way ad revenue is distributed – but it remains to be seen whether or not any such changes would impact upon all YouTube channels, or would be limited to the likes of Vevo accounts.
We noted earlier this month that the news regarding the annual salary earned by PewDiePie, who has the most subscribers on the site outside of YouTube’s own channels, suggested that even though he earns a considerable amount of money, he may still be receiving less than expected given the amount of ad revenue he pulls in for the site. If music labels force Google into a corner regarding the percentage of money generated by ad clicks its users receive, it could potentially lead to the site’s approach to monetization being turned on its head.