While earning a living from YouTube royalties is rare for music creators, especially considering the immense volume of content being created on the platform, they can provide a significant revenue stream, of which SOCAN members can take advantage. Here’s what you need to know.
There are two types of licenses that apply when you’re posting videos to YouTube: the master use license and the synchronization (or sync) license. The master use license is for use of the original master recording of a song; this is applicable only if you’re using other people’s pre-recorded tracks in your video, or you don’t own your master recordings. The sync license grants permission to use music in video, TV, or film—this is what’s needed to use your recording of someone else’s song in a YouTube video.
ROYALTY RATES UNDER THREE CATEGORIES
YouTube’s royalty system pays different rates under three categories:
1) YouTube Music,
2) your official channel as a musician, and
3) Content ID.
YouTube Music is a premium subscription streaming service, separate from standard, free YouTube; it’s YouTube’s move to compete with platforms like Spotify and Apple Music. Your official channel (on standard, free YouTube) is where you’ll post your music in YouTube video format. And finally, Content ID is YouTube’s automated system for allowing copyright owners to identify YouTube videos, which include content that they own. Depending on how your music is used, and who listens to it, you can make very different amounts of royalties from YouTube.
Standard, free YouTube pays royalties depending on how many views your videos get. To earn ad revenue on your own channel, you’ll need to join the YouTube Partner Program and turn on ads. You’ll get performance royalties for any broadcast of your music. You’ll also get mechanical royalties for the interactive streaming of your song. The revenue you receive as the owner of your music can also come from monetizing the content on YouTube.
To monetize your content, you’ll need to sign up for Content ID. If you’re approved, YouTube will place ads (or banner ads) on your content—and then it all depends on the viewers. If a viewer watches more than 30 seconds of the ad, or clicks on the banner ad, you’ll generate revenue, split between YouTube (45%) and you (55%). The “30‑second” rule applies to certain TrueView cost-per-view ad buys (skippable in‑stream), not to all ad formats. More info about that here.
YOUTUBE MUSIC
On YouTube Music, the subscription streaming service, you’ll get paid per stream when users play your songs. Your performing rights royalty payment has nothing to do with content monetization, except when musical content is manually flagged by the license owner to be excluded from monetization for a specific market, and those view counts are excluded from being reported under SOCAN’s model.
On YouTube Music, the average payout right now, if you own 100% of the song, is around $4 for every 1,000 views. On your official channel as a musician, on average, 1,000 views of your video will make you around $1.64. For a video monetized within the Content ID system, 1,000 views will make you an average of about 87 cents.
There are many different factors that affect your royalties. With YouTube Music, as with any other streaming service, your agreement (i.e., share splits) with your co-writer(s), publisher, distributor, or label will affect the amount of your streaming revenue. If you have a lot of listeners on standard, free YouTube, you’ll make less than you would from listeners subscribed to YouTube Music, as per the comparison above. Where your listeners are located will also affect royalties: YouTube Music subscription prices are different depending on the country, so if many of your listeners are located somewhere with a lower subscription price, you’ll make less; if somewhere with a higher subscription price, you’ll make more.
CONTENT ID
Content ID makes digital “fingerprints” of sound recordings—and to be clear, that’s the actual recording, not the underlying work (i.e., the song). YouTube searches for fingerprinted music in videos uploaded by you or anyone else. It can also identify cover songs, even when the video doesn’t include the original fingerprinted sound recording, because YouTube’s algorithm detects melodies that are similar to the reference track. When a match is detected, a claim is automatically made on behalf of the copyright owners that YouTube knows about—typically record labels and music publishers, or their designated agents (including rights organizations like SOCAN).
Content ID is the basis of how SOCAN gets you paid for YouTube performances of your music, so it’s crucial to make sure that recordings of music that you wrote make their way into the system. There are two main ways to do that: If you work with a record label, your label should be supplying your recordings directly to YouTube. The same goes for other artists’ recordings of your music—the label or master owner can supply the files to YouTube. If you don’t work with a label, an approved distributor can also submit music to YouTube for Content ID. Once Content ID ingests your audio files, YouTube uses them as reference tracks to identify performances of your music across the platform. If you find that your music is being used without permission, you can submit a copyright infringement claim to have that video monetized on your behalf.
Generally speaking, SOCAN licenses YouTube on a blanket basis, calculating royalties based on the use of rights holders’ songs for performance royalties, and based on the market share of their songs for reproduction royalties.
Setting up Content ID is important. Once you’ve submitted proof of ownership, and completed a Content ID agreement, you can register your assets. An asset is a collection of information about a piece of intellectual property; for a YouTube video, this includes a reference file (the video itself), metadata, ownership info, and the policy to be applied if matching content is found. YouTube Help has extremely detailed instructions on how to manage your assets. When a match is found, YouTube applies your preferred policy to monetize, track views, or block the video. You can create a custom policy based on location, or have one blanket policy for the whole world.
YOUR OWN CHANNEL
Another way to make money on YouTube is through video streams on your own channel. There’s a catch, though—for YouTube to place ads on your videos, and for you to make a profit, you’ll need at least 1,000 subscribers, and more than 4,000 watching hours in the past 12 months. Once you’ve met this threshold, you’ll be able to monetize your videos through the YouTube Partner Program. Often, this isn’t easy to achieve. Even accounts with many subscribers can struggle to hit the 4,000-hour criteria. Basic social media and music promotion strategies applicable to any platform can help: a consistent posting schedule, engaging with comments, and cross-posting your YouTube content to different platforms. And remember, your focus shouldn’t be just numbers; the goal is to build a community around your music, which will lead to more income, in and of itself. Create exceptional music, promote it on all platforms, keep your visual brand consistent, engage followers, and post regularly.
You can also Leverage YouTube’s algorithm. Optimize your titles, tags, and video descriptions for the YouTube algorithm. Titles need to be succinct while accurately describing the video. Also, make sure your thumbnail image is clear, simple, and aimed at your target audience. The more you post, the more the YouTube algorithm rewards you. YouTube content creators recommend posting once a week, if not more; once a day at the start will help you gain momentum. When people start viewing your videos, use YouTube Analytics to break down the demographics and see what time of day people watch, so you post more effectively.
Collaborations and cross-promotions also help. To boost your YouTube presence and your YouTube royalties, collaborate with other YouTubers. Don’t just collaborate with someone because they have a large following; consider what you bring to the party, as well as the possible synergy of your audiences. This is no guarantee of success, but it’ll give you a chance to be heard above the noise. Consistent content keeps your audience’s attention, and noticing your fans is crucial to building an audience.