YouTube is a video-sharing website on which users can upload, view and share videos. It displays a wide variety of user-generated video content, which includes music videos, allowing YouTube and the music industry to collaborate in selling compositions, recordings, and performances of music
Before YouTube, hosting your own videos was a complex and expensive process.YouTube gave all that away and made the user experience significantly better. This included a huge opportunity for the record labels to promote their music.
YouTube popped up out of nowhere half a decade ago as a source of easy video hosting and sharing. And while it may still be widely used for amateur and personal videos, it's also a major source of music videos. As such, music videos have been a tremendous vehicle for promoting acts.
"(YouTube) is not like radio, where it's just promotional," said Caraeff, who heads up Universal's digital group. "It's a revenue stream, a commercial business. It's growing tremendously. It's up almost 80 percent for us year-over-year in the U.S. in terms of our revenue from this category."
"YouTube is the ideal place for labels to promote music and for fans to discover new artists and old favorites," said Chris Maxcy, YouTube's partner development director. "We're committed to being a good partner to music labels and are pleased they're having success on the site."
"YouTube is music's killer app," declared Forrester Research analyst Mark Mulligan at Canadian Music Week in Toronto, "The music video remains the consumer usage sweet spot." Vevo chief Rio Caraeff was more than happy to second that notion, especially given his hand-in-glove relationship with the video giant. "YouTube is like a cable network, and Vevo is the channel," Caraeff described.
In 2005 when Chad Hurley, Steve Chen and Jawad Karim founded YouTube, there’s no way that the three of them could have predicted that they would change the music industry and ultimately the world. YouTube has revolutionized the entertainment and music world and as a result has brought the entire world together.
There are at least three ways in which Youtube has changed the music industry. One way is that YouTube has made the world smaller (YouTube has given us the power to travel around the world and explore distant countries, and cultures); secondly, YouTube helps people get discovered (YouTube has opened the doors for talent discovery); and thirdly, the convenience YouTube offers with countless musical and artistic material that can pertain to every individual has become easy.
The largest labels, including Jessie J's Universal Music Group, are making "millions of dollars a month" from the advertising alongside their videos [on Youtube], a senior executive at the site has revealed. He added that his company's relations had improved with the labels, after the two sides fell out over royalties in 2009. YouTube has revealed that its music partners, which range from Sony, Warner, Universal and EMI to independents and individual artists, have doubled and in some cases trebled their monthly revenues over this time last year.
Mr. Patrick Walker,senior director of content partnerships for YouTube in Europe, Middle East and Africa, added that new devices including tablets and the rise of video views on smartphones, would boost revenues. Warner had been the first to sign a deal with YouTube, in 2006, before the other majors signed up. There are now 2 billion views on YouTube a day, up 50 per cent from 2009, with 35 hours worth of video uploaded every minute.
One recent calculation showed that one radio spin is equal to roughly 250 YouTube streams, at least as it relates to artist revenue. "A large percentage of views come from a small percentage of artists, and 25 brands drive 80 percent of our revenue," chief Rio Caraeff of Vevo relayed.