Music has always been a big part of what has drawn people to YouTube. Starting about a decade ago, this platform replaced MTV as the place fans visited to watch music videos from their favorite acts. User Generated Content (“UGC”) was also very prevalent in the early stages of YouTube, however, the initial approach to UGC was very different than it is today. The reflex reaction of rights holders was to make efforts to remove UGC with the unauthorized use of copyrighted works. Today, rights holders are allowing and in some cases even encouraging the uploading of UGC containing their copyrighted works because of the opportunity to share advertising revenue. Artist income from YouTube is increasing even though royalty rates are not as sizeable as they are on other platforms. The fact that this income stream did not exist a few years ago is proof that the industry is slowly catching up to properly compensating artists. Artists should receive a greater share of the money coming into these emerging models, however, it is a positive sign that income streams are being created today that did not exist before.

On YouTube, anytime someone posts a video containing music there are three potential rights holders. The owner of the video has a copyright in the video itself. The owner of the sound recording must typically issue a license to the video owner in order for the video owner to rightfully use that music in conjunction with their film. Finally, the song copyright owner must also give the okay to the film creator to use background music containing the owner’s song.

YouTube videos can only be monetized when all three rights holders consent to the video being monetized. Therefore, the easiest route to monetization if you’re a copyright owner is to write your own song, record and own the recording, film and own the music video for that song and place said video on your own YouTube channel. You can monetize your YouTube channel by selecting “Enable Monetization” in the Channel Setting tab after you log in to your YouTube channel account. Since most sound recording copyright owners are record labels, the more common set up is to have two rights holders agree to the monetization of all applicable rights. The record label may have their own channel where they include videos of all the artists on their roster. Under this arrangement, it would be possible for the label to own the video and the sound recording while the artist owns the copyright in the song. Similarly, the artist may have their own channel containing videos of their songs were the label has the same intellectual property rights as in the immediately preceding example. The only difference between the artist’s YouTube channel and the label’s YouTube channel in most cases is where Youtube sends the ad revenue.

What happens when a third party uploads a video that contains the label’s sound recording along with the artist’s song? Ten years ago many artists tried to take down every unauthorized use of their copyrighted material. This exercise became the most futile version of the game “whack em all” one could imagine.

In recent years, YouTube has given copyright owners the option of sharing ad-revenue instead of taking down videos containing their works. The income generated by ad-revenue on YouTube is growing and significant, even though it is not on par with the income generated on other platforms. Most copyright owners are opting into the ad-revenue sharing program on YouTube. How this works if you’re an artist is that your publishing administrator works with YouTube to identify each instance your sound recording appears in UGC across the billions of videos uploaded onto the platform. “Content ID” is the name of the technology that makes the identification of copyrighted works possible. Rights holder claims are placed on identified videos. Rights holders then have the option to take down, block, mute, or allow YouTube to place ads on UGC. The 3rd party uploader forfeits their right to share ad-revenue once a claim is placed on a video. This revenue is shared most often between the record label and the songwriter.  While this scenario can describe a fan of an artist making a slide picture video of said artist’s most popular song, it can also describe the situation where an up and coming singer-songwriter covers a Bob Dylan song where Bob Dylan decides to opt-in to YouTube ad-revenue sharing. The singer owns the sound recording for the cover but his or her posting of the video on You Tube is not technically legal because Bob Dylan’s publisher must be paid a synchronization license (license for pairing someone else’s song with video) due to the fact the posting party is signing Bob Dylan’s song and not their own on video. YouTube ad-sharing gives rights holders an incentive allow technical infringements because of the ad revenue they can receive (although a lot less than they would get for individually negotiated synchronization licenses) from an infinite number of sources.

While YouTube is often viewed in the independent music community as more of a discovery tool, more and more YouTube is also being viewed as a viable source of income. Whether your goal is to be discovered or increase your income as an artist, YouTube is not a platform you should ignore. Two things any artist can do to increase exposure and maximize income on YouTube is to 1) put every single song you’ve recorded on your YouTube channel, and 2) encourage your fans to make their own YouTube videos using your songs. Not every song you upload on your YouTube channel has to be a professionally shot video. Pictures and slideshows make acceptable content where the goal is to make your music widely available. This is important because people are increasingly using YouTube as their personal jukebox. Getting fans to create their own videos using your works adds to your bottom line and increases fan engagement which has a multiplier effect towards achieving your career goals.