Record companies are looking at a big hurdle with YouTube as they continue the transition to a digital market. Today, almost two-thirds of people under 18 use Google’s video site to listen to music, according to a new report from Nielsen.
“Among adults, the most popular ways to listen to music were radio (67 percent), CDs (61 percent), YouTube (44 percent), Pandora’s custom-radio service (32 percent) and Apple Inc.’s iTunes (29 percent),” reports the Wall Street Journal.
“Among 13-to-17 year olds, YouTube was the most popular way to listen to music, with 64 percent using it,” notes the article. “Radio was next, with 56 percent, followed by iTunes (53 percent), CDs (50 percent) and Pandora (35 percent).”
For the record industry, this creates a challenge for monetization. “Record companies and music publishers typically realize some revenue from advertising that appears with their videos on YouTube. But it is only fractions of a cent per play, and not nearly enough to replace the revenue that has been lost as CD sales have been decimated,” explains WSJ.
Additionally, the popular YouTube app on Apple devices — which will actually be removed on the latest iOS update — doesn’t run any advertising, which means no revenue for the record companies.
“Three of the four major labels make their videos through a company called Vevo LLC, whose videos play on the YouTube website but not on its smartphone app,” notes the article. “However, consumers don’t use Vevo much — or at least don’t realize when they do. Only 7 percent of adults and 11 percent of teenagers identified Vevo as a way they listen to music.”
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