It’s no secret that YouTube is now one of the primary engines that drives music discovery on the web. Last year, one survey even showed that two-thirds of teens 18 and under used the site to listen to music more often than any other format – CDs, downloads and audio-only streaming services included.
As more consumers come to rely on the video streaming site and grow accustomed to increasingly high production values, YouTube has finally begun to turn from the Wild West it once was, into a freshly-tamed frontier where creative professionals can actually begin to make a little bit of sustaining income for their efforts.
What led to this change was the success of YouTube’s Content ID system, which creates “digital fingerprints” of audio and video files in order to help flag unauthorized and exploitative uses of artists’ work.
Up until recently however, there’s been one big problem: Many independent and self-released artists have had trouble accessing the Content ID service at all, and those with access, have often had to give away a significant chunk of their revenues to intermediaries.
Thankfully, that too is beginning to change, largely due to new competition in the market.
Content ID, Then and Now
YouTube’s Content ID system was first developed in 2007 in response to a major lawsuit from Viacom. The charge? That the site had knowingly profited by distributing stolen work – a breach that would make them lose their protection under the “Safe Harbor” clause of the DMCA.
When Content ID first launched, YouTube offered it only to the large media players who had demanded its creation to begin with. Eventually, the service became available to significant independent labels and distributors, like The Orchard.
For some time, however, the smallest independents and self-released artists were largely left out. But that began to change last year, when CD Baby teamed up with Rumblefish in order to bring comprehensive YouTube rights management to its users.
This summer, things really began to heat up as the founders of the indie distributor Tunecore stepped into the game with a new startup called Audiam. At about the same time, ONErpm and AdRev debuted their own new services as well. These latest intermediaries promise to make Content ID available to more rights-holders than ever before – and pay out record percentages, too.
The Services Compared: CD Baby (Partnered with Rumblefish)
The one thing that CD Baby has going for it is convenience. If you already use the platform, you don’t have to do much to have them help you take control of your rights. Just check a box and you’re done. The drawbacks however, are twofold:
Number one is that CD Baby pays out a relatively low percentage of ad revenues when compared to the newer services on the market. In part, this is because with them, you’re essentially using two layers of intermediaries.
Although CD Baby itself only takes an easily justifiable 10% cut off the top, they turn around and hire Rumblefish to actually do the license management. And that company takes another 50% for themselves.
In the end, the artist is essentially left with 45% of revenues for herself (and that’s not even counting YouTube’s cut of ad revenue, which we’ll largely leave out of of this overview for the sake of a simple and even comparison.)*
Although 45% is far better than the 0% that YouTube thieves are willing to pay for licenses, it’s clear why so many new companies have seen a clear opportunity to step in and offer artists more.
The second problem with the CD Baby/Rumblefish combo is that it can make it more difficult for artists to sell their own ads on their own channels.
If you have your own YouTube channel (or if you’re a member of a “Multichannel Network” like Vevo and IndMusic) chances are that you’ll be able to negotiate a higher rate on advertising than you’d be able to get through Content ID claims. And of course on your own channel, you can keep 100% of these higher net revenues for yourself, no Content ID intermediary necessary.
Critics complain that by default, CD Baby and Rumblefish use Content ID to claim content on your own channel, subjecting you to a lower advertising rate, and a 55% cut off the top. You can opt out of this, but it appears that doing so currently requires an extra step later on. (CD Baby did not respond with comment.)*