YouTube costing the music industry quadrillions, and other figures we can pull out of thin air

By Mark Stenger

YouTube has revolutionized how we get our daily cute animal fix, and it’s also been a major pain for the music industry who constantly is flagging content.

While the video site has made it easy for companies to remove copyrighted content, the effect of privacy continues to hurt sales, or so a new study would lead you to believe.

In 2009, Warner Music Group pulled all its videos from YouTube and went on a blackout spree, muting or blocking videos that contained any of its copyrighted works, even those created under Fair Use.

Eventually, the company reached a deal, and brought its artists back to the site.

University of Colorado and Fairfield University researchers studied the blackout, and its impact on music sales. Analyzing the top 200 albums on Billboard during the nine-month period, they found that album sales were up an average of 10,000 units per week.

“While a great deal has been said about the potential role of these services in promoting and discovering new artists and music, our results cast some doubt on this widely believed notion, at least with regards to top selling albums, and our sales displacement results support laws that create digital performance rights for sound recordings.”

Going further, using 4,000 less units sold per week as a conservative figure, researchers estimated that a top album saw $1 million in lost income per year due to YouTube.

Take into account 40 of those top albums were from Warner Music Group, and that number now jumps to $40 million in lost sales.

However, the formula to reach the million-dollar figure only factored in CD sales, and the average album costing $12. In 2009, 25 percent of total music sales were from digital album sales, which was up 9.2 percent.

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