Understanding ’15’: How Record Labels And Artists Can Fix Their YouTube Woes

The artist-and-labels-versus-YouTube crisis is going to run and run, even if some form of settlement is actually reached…the divisions and ill feeling run too deep to be fixed solely by a commercial deal. What’s more, a deal with better rates won’t even fix the underlying commercial problems. Music videos under perform on YouTube because they don’t fit YouTube in 2016 in the way they did YouTube in 2010. The 4 minute pop video was a product of the MTV broadcast era and still worked well enough when online video was all about short clips. But the world has moved on, as has short form video (in its new homes Snapchat, Musical.ly and Vine). Short videos are no longer the beating heart of YouTube viewing and quite simply they don’t make the money anymore. This is why music videos represent 30% of YouTube plays but just 12% of YouTube time. If record labels, publishers, performers and songwriters want to make YouTube pay, they need to learn how to play by the new rules. And to do that they need work out what to do with ‘15’.

youtube monetization

There Is A Lot More To YouTube Revenue Than Some Would Have You Think

The recorded music industry gets radio, and it is beginning to get streaming. Both are all about plays. Each play has, or should have, an intrinsic value. They are models with some degree of predictability. But YouTube does not work that way, which is why the whole per stream comparison thing just does not add up. In MIDiA’s latest report ‘The State Of The YouTube Music Economy’ we revealed that YouTube’s effective per stream rates (that is rights holder revenue divided by streams) halved from $0.0020 in 2014 to $0.0010 in 2015.

Sounds terrible right? And make no mistake, there is no way to spin it into a good news story. However, it didn’t fall because of some nefarious Google ploy. It fell because of many complex reasons (all of which we explore in the report) but the 2 biggest macro causes were:

  • YouTube pays out as a share of ad revenue (55%) not on a per stream basis. So when the value of its ad inventory goes down (due to factors such as more views coming from emerging markets with weaker ad markets) the revenue per stream goes down too. This is something the labels can do little about, though an increased revenue share will soften the blow as YouTube globalizes.
  • YouTube serves its in-stream video ads (the most value ad format) on a time-spent basis, not on a per-video basis. Our research found that the average number of video ads per hour of viewing comes out at about 4. That means if you have 15 minute videos (like many YouTubers do) you will get a video ad every play. But if you have 3 or 4 minute pop videos you may only get 1 video ad for every 4 or 5 plays. Which means 4 or 5 times less video ad revenue. In fact, our research revealed that just 26% of music video views have video ads. This is the underlying issue the industry needs to address, and unlike global ad market dynamics, this is something it can indeed fix.

The 15 Scale

This is where the magic number 15 comes in. Right now music video sits in the same 3-4 minute slot it has done so ever since MTV said it wanted videos that length. Yet video consumption is now polarized between the 15 second clip on lip synch apps like Musical.ly and Dubsmash and 15 minute YouTuber clips. Falling in between these two ends is revenue no-mans land. As I have written about before, labels and publishers need to figure out how to harness the 15 second clip as an entirely new creative construct and shake off any old world concepts that this is actually anything about marketing and discovery. It is consumption, plain and simple…it just happens to look unlike anything we’ve seen before.

At the opposite end of the 15 scale labels and artists need to start thinking about what 15 minute formats they can make. Think of this as a blank canvas – the possibilities are limitless. For example:

  • 3 track ‘EP’ videos interspersed with artist narrative and reportage coverage
  • Live sessions (recorded by, and uploaded by labels so they get revenue as well as publishers)
  • Mini-documentaries such as ‘the making of’s
  • On-the-road features

15 Minutes Does Not Have To Break The Bank

And before you cry out ‘but this stuff will cost so much more to make’, it doesn’t have to if more is made out of current assets and processes. For example, ensure that one of the support crew has a handheld camera to film some shoulder footage for reportage. The whole thing about YouTube is that it doesn’t have to be super high production quality, in fact the stuff that does best patently isn’t. YouTube videos that work best are those that are an antidote to the old world of inaccessible glamour. If you really want to do things on the cheap, simply splice three music videos together into a single long form video (e.g. tag 2 older tracks onto the new single). Doing so will nearly treble the video ad income.

And before you think this isn’t what audiences want, ask Apple about ‘The 1989 World Tour LIVE’ and Tidal about ‘Lemonade’.

And (yes another ‘and’) if you can’t get your head around the inescapable need for a completely new music video construct, just think about it this way: 15 minute videos will make you 5 times more video ad revenue. This really is a ‘no brainer’.

Back To The Future

As a final piece of evidence (not that it is needed), cast your mind all the way back to 1982, to Michael Jackson’s landmark video ‘Thriller’. A 13:42 video that is widely recognized as one of the all time music video greats that has also racked up 330 million views on Vevo. So you could say the case for 15 minute video was already made a quarter of a century ago (thanks to MIDiA’s Paid Content Analyst Zach Fuller for pointing that one out).

The 4 minute music video is dead, long live the 15 minute music video.

For more detail on our ‘State Of The YouTube Music Economy’ report check out our blog.

You can also buy the 25 page report with 8 page data set here.

15 thoughts on “Understanding ’15’: How Record Labels And Artists Can Fix Their YouTube Woes

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  3. How can you say that a 15 minute video will make you 5 times more video ad revenue?
    I believe for this statement to make any sense you have to verify the sub conditions that have to be essentially achieved to a justify this rather general, and in my opinion somewhat misleading, statement!
    I find the article very helpful and insightful in its analytical approach but am completely unconvinced that the conclusions drawn are particularly helpful..
    As always people in the music industry seem to forget about quality and connective potential of content!, be it the music or the visual.
    I would think you tube is first and foremost a video/visual platform. That it also serves as an audio streaming service is a by product that really causes most of the problems the entitled music content holders seem to have with the platform.

  4. Pingback: An End To 4 Minute Music Videos: How Record Labels And Artists Can Fix Their YouTube Woes - South Carolina Music Guide

  5. Much of this advice is worth considering, especially for artists who can get creative within that suggested 15-minute format. But I feel like this argument ignores one crucial thing: videos are 4 minutes long because songs are 4 minutes long, on average. So it’s not like we got conditioned to create 4-minute music videos because MTV was seeking ad-optimized content (well, as you said, that probably was their intent). But the video length just made sense. You make a video that’s as long as your song — with a few notable exceptions (like the one you mentioned: “Thriller”).  

    Most musicians are musicians first and last. Video production can be smart marketing, it can be an inspiring creative exercise, but I think for lots of us it’s icing on the cake, not the cake itself. If you see yourself primarily as a video content creator, absolutely do what makes the most sense for your videos and for the video platform you prefer. But if you’re a musician first, you want everything else to support your vision for how your songs should be presented and experienced, not use the music as stuffing for whatever sized turkey is trending this year.

    All that being said, I often love when musicians make extended videos — like Onry Ozzborne’s “duofilm,” which runs exactly 15 minutes: http://diymusician.cdbaby.com/youtube/behind-the-scenes-of-an-independent-hip-hop-video-shoot/. So I think you’re onto something for sure; I just worry about musicians when this becomes the standard expectation of YouTube audiences. If they want an experience that’s 15 seconds or 15 minutes long, maybe those viewers aren’t really into consuming a song after all, but something else, something new, something that can be equally valid from a creative/entertainment standpoint, but ISN’T a song. And at that point a musician who primarily just wants to make and perform songs will have to ask themselves if they’re spending time on the right pursuits and platforms.

  6. I appreciate all of the insights. I found this analysis fascinating. I am also curious as to how artists, labels, writers & publishers participate in the ad revenue that is not part of the artist’s video, that appears on the page. Who gets those funds and how are they calculated?

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