YouTube is poised to overtake Spotify as music’s biggest bankroller. We crunched the numbers to predict the tipping point:
Lyor Cohen says YouTube, once the main target of the music industry’s ire, can soon offer the biggest payouts of any digital music service. We crunched the numbers, and they are on his side
How long might it take YouTubeto permanently overtake Spotify as the the music industry’s number one sugar daddy? To predict this tipping point, let’s look at some historic growth rates.Within Spotify’s recent annual report, the company confirmed that “our expenses for rights-holders grew by 17 percent compared to the prior year.” If we retrospectively apply this 17-percent growth metric to Ek’s $5-billion-in-2020 figure, it indicates Spotify paid out somewhere around $4.3 billion to rights-holders in 2019, and grew this by around $700 million in 2020.
Now let’s look at YouTube’s $4-billion-in-the-last-year figure. (YouTube tracked a slightly different period than Spotify, June 2020 to May 2021, but both services reported figures for a 365-day year.) The $4 billion figure is 33.3 percent higher than YouTube’s last reported payout: In February 2020, YouTube’s boss Susan Wojcicki
confirmed that the platformpaid music rights-holders over $3 billion in calendar 2019.There is one more tweak required before we start mapping out the future: YouTube’s 33.3-percent growth here was over the span of 15 months (from end of 2019 to end of May 2021) while Spotify’s 17-percent figure reflects pure year-over-year growth. If we proportionately reduce YouTube’s 33.3-percent figure to 12 months rather than 15 months, its projected annual growth figure gets trimmed to 26.6 percent year-over-year. headtopics.com
This gives us enough rough numbers to play with.Chart by Rolling Stone / Music Business WorldwideThe above chart maps out what would happento Spotify and YouTube’s annual music business payouts in the next few years, should they both stay on their current courses (based on a flat $5 billion payout for Spotify and a flat $4 billion for YouTube in 2020 — though in reality the latter number obviously ran mid-year 2020 to mid-year 2021).
As you can see, if YouTube’s payouts keep climbing at a 26.6-percent annual rate vs. Spotify’s 17-percent rate, YouTube will overtake Spotify somewhere around the end of 2023.The above graph also doesn’t take into account that YouTube’s ad revenues were up by that stunning 49% year-over-year in the first quarter of 2021. It also ignores that Spotify is now readying its investors for slower global subscription growth in 2021: The streaming service says it expects between 7 million and 11 million new subscribers this year, after adding 11 million new people in 2020.
I’d therefore suggest that unless Spotify can pull something spectacular out of the bag, YouTube’s “twin engines” may actually eclipse Spotify’s payouts even sooner — perhaps even at some point next year.Just four years ago, YouTube was lambasted as a
monster by many powerful music rights-owners. Within the next 18 months, as Beggars Group’s Martin Mills is already indicating, it will start looking more like the industry’s very best friend.Tim Ingham is the founder and publisher of which has serviced the global industry with news, analysis, and jobs since 2015. He writes a regular column for headtopics.com
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COLOMBIA SOS no more cocaine musical industry.... Or Spotify is slowly taking over and you were paid by YouTube to do damage control? Seems like a rolling stone thing to do… What’s scary about this is it’s down to volume - youtube pays the least to artists per play :( But why? YouTube sucks… Or you were paid by YouTube to smear Spotify. Either or…
SantanaCarlos PaulMcCartney BassPlayerWeb who cares if its youtube or spotify? their users still are stealing from the artist. as long as this generation is not buying cds or vinyl, they are thiefs who do not have any idea what music means. period. YouTube music sucks. People using Google music that were forced inyy to o it got an inferior platform
Meanwhile, artists are still getting screwed by labels... Out-paying Spotify is fruit that's so low-hanging it's underground……………. YT VS SP
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