Music Business and Trend-Mongering

Warner’s demand that thousands of videos featuring their music be removed from YouTube gives artists another reason to think twice about signing with a major label. Two years ago, all four major labels signed a licensing agreement with YouTube that provides them with a per-stream fee for each video viewed (whether it is a video created by the majors, or one which is user generated), as well as a share of YouTube’s advertising revenue.

The existing deal is nothing to sneeze at. While it is unclear how much revenue Warner has taken in from YouTube, Universal has brought in “tens of millions of dollars” from their relationship with YouTube, according to Rio Caraeff, executive vice president of Universal Music Group’s eLabs. The problem is that Warner Music is not seeing the forest for the trees. In their quest to max out all their possible revenue streams, Warner is overlooking the fact that their music business is built on the backs of artists who need this connection with their fans to grow their base and further their career. Inserting a barrier into this process, where fans cannot add the music of their favorite artists to their homemade videos, or send around a new video to their friends, is not a good way to draw in new fans. And again, unlike traditional marketing outlets like commercial radio, YouTube is an emerging revenue stream as well. “It’s growing tremendously,” says Caraeff. “It’s up almost 80 percent for us year-over-year in the U.S. in terms of our revenue from this category.”

As Amanda Palmer from the Dresden Dolls writes on her blog “it’s abSURD. they are looking for money in a totally backwards way. money that, i should point out, i would NEVER see as an artist. if they got their way and youtube decided to give them a larger revenue share of the videos, it’s very unlikely it would ever make it’s way into the artists’ bank accounts.
i loved my videos. now they are gone. why is life so hard? did i mention that being on a major label is starting to seem like…..not such a grand idea?”

Prince has always been a bit of an enigma to me. Although I was a relatively early adopter (Purple Rain was one of the first cassettes I ever bought, right after Duran Duran Rio), I sort of lost interest by the early 90s. But even when I wasn’t listening to his music, I was always keenly aware of Prince’s marketing chops. The slave/symbol thing might have been a little out there, but great marketing – it kept Prince in the public eye when there was a bit of a lull due to a fight with his label.

That being said, I jumped back on the Prince train with his 2004 Musicology release and subsequent tour. The music was impressive, but even more impressive was Prince’s tour sales strategy. Prince gave away a copy of his new record with every ticket sold on his arena tour, and SoundScanned every one (meaning that every CD that he gave away with the price of the ticket was counted as a sale by SoundScan, the company the record industry uses to account for retail or show sales). It was a brilliant idea for a couple reasons. First, his record reached #1 based on these show sales, which generated even more press for him. Second, it shows that Prince understands the power of “word of mouth” to sell his music.

At least that is what I thought. I was surprised to read today that Prince took a page from Metallica’s playbook by personally fighting YouTube and demanding that his footage be removed. Prince has hired a firm, appropriately named Web Sheriff, to remove the offensive videos. I found the description of their difficulties to be pretty funny:

“In the last couple of weeks we have directly removed approximately 2,000 Prince videos from YouTube,” said Web Sheriff managing director John Giacobbi. “The problem is that one can reduce it to zero and then the next day there will be 100 or 500 or whatever…” he told Reuters.

Seems like an exercise in futility to me.

Perhaps this is another brilliant press move on Prince’s part. But I think the YouTube video of Prince’s solo at the end of “While My Guitar Gently Weeps” from the 2004 Rock and Roll Hall of Fame show did more to raise his visibility than pretty much anything else he could have done at the time. It doesn’t seem right to me that someone who would spit in the eye of his record label by bundling his CD in with newspapers in England would fight such a powerful promotional vehicle.