Music
A New Way for Musicians to Make Money on YouTube
In 2001, composer Scott Schreer wrote a roughly two-minute saxophone-heavy acid jazz instrumental called Love Doctor, and the song lives in an online catalogue of music that he licenses to film and TV producers. It also exists in some 1,500 YouTube (GOOG) videos that used the song without paying for the rights. Hunting those stray recordings and trying to collect licensing fees has never been worth most musicians’ trouble. In May, however, Schreer started getting paid by the former freeloaders.
Love Doctor and Schreer’s library of about 1,700 other tunes now bring his company about $30,000 per month from their use in YouTube videos. He’s the test case for a New York startup called Audiam that says it can help artists profit when others use their music. Jeff Price, Audiam’s founder and a friend of Schreer’s, pitches musicians like this: “Let’s go find you money that already exists.”
Big record companies and music publishers already have deals with YouTube to collect money when their songs show up in videos. Small artists and composers don’t. Price wants Audiam to be the middleman for them. When YouTube ads appear on videos while their music is playing, Audiam will claim a share of the revenue and send it along to the artist—minus a 25 percent cut. “It’s magic money,” Price says. “It’s buried treasure.”
Price has helped indie artists profit before. In 2006 he co-founded TuneCore, which lets musicians distribute their songs to iTunes and other online markets. He was ousted by the board last year in a nasty public feud, and he launched Audiam as his next act.
He picked a giant target in YouTube. The Google video-sharing website streams 6 billion hours of video each month. By one estimate, YouTube contributes 10 percent of Google’s revenue, which topped $50 billion last year. That would put YouTube’s revenue at about half of what’s spent on billboard advertising in the U.S.
Audiam was launched abroad in mid-June and will be ready to work with other artists in the U.S. by late July. Musicians can sign up for free and send the company their songs, granting Audiam the right to license them on YouTube. Audiam scans the gargantuan library of YouTube videos to find where those songs appear. The company does this with YouTube’s ContentID system and a separate piece of “audio fingerprinting” software called TuneSat developed by Schreer (he has a partnership with Price). Then Audiam authorizes YouTube to put advertising on those videos.
When Price and Schreer plugged Love Doctor into the system, it found 1,500 videos that had been played more than 100,000 times over 11 days in May—good for $120 in licensing fees, according to Schreer.
Few artists will see the kind of cash that Schreer now gets from Love Doctor and the rest of his catalogue. Schreer owns Freeplay Music, a library of hundreds of songs meant to be background music for videos. For a garage band with a couple of albums, any YouTube revenue will be “a little extra gravy,” says Aram Sinnreich, a media professor at Rutgers University and author of the forthcoming book, The Piracy Crusade. And Sinnreich says Audiam’s 25 percent cut is steep: Organizations such as Ascap and BMI that represent performers and songwriters typically take around 10 percent. (Price maintains that performing rights organizations collect more than that on YouTube; Ascap and BMI did not immediately respond to queries.)
Still, Sinnreich says, Audiam is poised to benefit from music consumers’ shifting habits. “The writing is essentially on the wall for the download model,” he says, as fans switch from buying music on iTunes to streaming songs on such sites as Spotify, Pandora, and YouTube. That’s proving to be a lousy way for even successful artists to earn money. Plenty of striving musicians would welcome revenue from YouTube clicks. “There are tens of thousands, maybe hundreds of thousands of independent composers and performers whose work does appear on sites like YouTube,” Sinnreich says.
And if a song like Love Doctor happens to show up on a video that achieves “Gangnam Style” reach, Audiam can make sure the musicians get their due. Says Schreer: “If someone takes the music you wrote as a garage guy in Minneapolis and puts it into a cat video that goes viral, you’re doing pretty well.”
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