Music videos - Now Income earners

It used to be that the 'short-form' music video was simply a marketing tool designed to promote album sales. No more - today the music video is a legitimate music product and has the potential to earn significant income for its owners, even in the context of "free" streaming sites like classic YouTube.

Consumers continue to watch music videos in sharply increasing numbers worldwide. The most watched artist on YouTube in 2012 was Justin Bieber, and in 2013, PSY and Miley Cyrus. (Bieber's videos have been viewed more than two billion times.) In December 2011, YouTube announced that it would be pursuing a strategy focusing on more prominence for its specialised music 'channels', including dedicated programming from artists such as Madonna. The service also embraces social networking by integrating with Facebook and Google+ so users can see what their friends are watching.

Indeed, YouTube is now dominated by music videos. In 2013, three out of four of the top trending videos were music videos, including Baauer's "Harlem Shake", Miley Cyrus' "Wrecking Ball" and PSY's "Gentleman". YouTube has encouraged the flighting of more professional music videos by incorporating paid into those videos, which appear for a minimum of five seconds before the videos play.

Google has actively engaged with content producers to ensure that YouTube channels can begin to compete with television. The most prominent dedicated online music video platform in the US is Vevo, which provides a revenue stream from premium high-quality videos, original music programming, live events and a forum to break new acts. Across its distribution footprint, Vevo reports it is currently streaming 25 billion videos a month to more than 415 million users world-wide. The fastest-growing parts of Vevo's platform are its mobile and tablet applications which are used by over 15 million people. The music video, a model that was principally used for Marketing purposes has thus become a commercial proposition.

Vevo generates revenues today through advertising and brand sponsorships. The service has attracted more than 550 advertisers from sectors ranging from automotive to finance. By its second anniversary at the end of 2011, Vevo delivered more than $100m in royalties to rights holders (courtesy IFPI Digial Music Report, 2012.) In March 2013, Vevo launched "Vevo TV", an advertising-supported internet television channel running 24 hours a day, featuring blocks of videos and specials.

The channel is currently available in Australia, Brazil, Canada, France, Germany, Ireland, Italy, Mexico, the Netherlands, New Zealand, Poland, Spain, the United Kingdom, and the United States., with other countries to follow. Vimeo is a competitor to YouTube. As of end of December 2017, Vimeo attracts over 240 million unique visitors per month and more than 873 million registered users. 15% of Vimeo's traffic comes from mobile devices. As of February 2013, Vimeo accounted for 0.11% of all internet bandwidth use, following fellow video sharing sites YouTube and Facebook.

The giant, YouTube, is now generating income for artists, generally by way of advertising revenue earned on the streaming of a particular video, which is then shared with the label and artist. One recent example of this is Korean artist PSY, who earned in excess of $8.1 million for his hit song "Gangnam Style." The video to the track reached more than one billion views on YouTube, earning an estimated $870 000 from advertising revenue for the site. PSY also gets a portion of advertising revenue from the huge numbers of parody videos that the song has spawned. In the US and South Korea, PSY is estimated to have earned over $3 million from online downloads (while CD sales have only netted him an estimated $50 000.)

Television is not to be forgotten in this scenario. MTV and VH1, of course, are still major players (although they have, naturally, diversified their offerings to include much more 'reality' programming than in the past, coupled with music content.) Other broadcasters also regularly flight music videos. VPL (Video Performance Limited) income has grown dramatically in the last few years.

The proliferation of music video channels and the increase in number of public performance sites showing music videos has enabled UK labels to grow this income for themselves (and hopefully their artists.) Videos are flighted at a fairly low rate but licensees have ready access to an enormous range of video clips, the use of which benefit their business and promotes the industry. While it used to be the case that broadcasters felt they were doing labels a marketing favour by flighting their videos, today the labels are realising, more and more, that music videos comprise valuable content for broadcasters, and that a VPL fee should be paid for their flighting.