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Record Labels Earn More Via Fan-Made Videos

A recent report in The Star has found that fan-made YouTube videos - including covers, mash-ups, lip-syncing etc. - generate more money for the music industry than official music videos posted by record labels. 

Francis Keeling, global head of digital business for Universal Music Group, explained to The Star: "A lot of that is due to consumers putting more and more repertoire and new versions up there, but also it's YouTube getting better at advertising."

With each upload tracked, YouTube notifies labels when users have uploaded content that uses a copyrighted song. Rather than removing the video completely, the record company can instead choose to run ads before and during the video - thus generating more money off the video's views.

"It's a massive growth area. We're very excited about the creativity of consumers using our repertoire and creating their own versions of our videos," said Keeling.

An example of this is American comedian Steve Kardynal's lip-synching, bikini-clad, Chatroulette rendition of Carly Rae Jepsen's 'Call Me Maybe'. The video garnered more than 14 million views, which then earned valuable ad dollars for Jepsen and the record label behind the hit single. 

With over one billion worldwide users, YouTube is the most-used music service in the world. In 2014, YouTube is expected to introduce a new premium subscription, which will provide labels with another source of revenue.

Interest in online subscription services has rocketed over the past three years. In 2013, 28 million people paid for online subscription services such as Rdio, Spotify and Deezer, a vast increase from only 8 million in 2010.