Youtube and Google have money problems

The Guardian has an interesting article in which it explains, kind of, sort of, Google/Youtube's attempts to help record labels make money off their illicit versions of their songs.

Anyone who has ever tried to get unauthorised versions and videos of their music off YouTube knows that filing takedown notices is like playing Whac-a-Mole, as new versions pop up almost immediately. But now, with YouTube's ad partnerships, record labels are discovering a better solution: monetising them.

Note I wrote record labels, not the musicians themselves.

Where have I heard this again.. OH RIGHT! Monty Python. Back in 2008 (actually it's been going on for 7 years, according to their authorized channel ) , Monty Python was faced with the same dilemma: how the hell do you get rid of those pirated sketches in existence. The answer from Youtube? Create your own channel. In other words, it wasn't an answer at all.

But let's go back to the Guardian article. It uses an example of the kinds of money one can earn on Youtube as shining examples of a business model. forget for a second the anomaly one hit wonder that is Gangnam Style. The actual numbers are quite different. In one case, says Martin Goldschmidt, founder of Cooking Vinyl for every million views they can make an average $5,000 bucks. Or as the article says "under certain circumstances. Most notably, whether or not you have a pre-roll ad running on your site.

And who makes the most money off the pre-roll ad? Hm. I might have an idea.

But again, it all depends on which day you talk to youtube and google. See, the above number was $5,000 per million hits. The Guardian reported some indie labels saying Google takes 30% of the revenue. Yet the article also references Dead Kennedy's guitarist East Bay Ray said via NPR that Google/Youtube takes 45% of ad revenue and all told Dead Kennedys have seen a couple hundred dollars. And in some other cases, songwriters make $40.00 per one million hits. Not four thousand. Not four hundred. Forty.

Supposedly the record labels are still reaping the profit from this scheme but only because they've learned that one weird trick: pre-roll ads, especially with those garish ones like thrid-party sales team Vevo. This of course generates more money for Google/Youtube. It's just no one knows how much. Clever, huh?

I love how the Guardian article ends by saying: "Now, if the opacity of how the songwriters' share of ad revenue is calculated – and the issue of how the numbers currently don't seem to add up – can be resolved we may even see ad partnerships rolled out and videos monetised in the 94 countries where YouTube is accessible but unlicensed."

Yeah I'll bet they would love that last bit. But c'mon-- the issue of how the numbers don't seem to add up-- surely the guardian is being tongue in cheek here, no? You're telling me a company as successful as google has no idea how the numbers add up? Rly?!

East Bay Ray (who said his income has halved in recent years) said it right:

"What YouTube claims is irrelevant until they produce how much they've made off my band and how much they've shared with my band," he says. "Don't let them bullshit you that it's too complicated."

Half the fun of the google-youtube complex is following the Alice in Wonderland, double speak to find the money. Because of there's money to be had, we all know where it's going. The only question, which google has successfully avoided answering concretely, is how much. But as usual, we know where it isn't going. The artists.

P.S. Awesome Dead Kennedy's flyer photo linked from Wesh's Photostream via Flickr.