Sony Music Re-Ups With YouTube; First Major Label In Second Wave
This story was written by Staci D. Kramer.
As expected, Sony (NYSE: SNE) Music Entertainment is the first major label to re-sign with YouTube, AllThingsD reported tonight and I can confirm. Details are unclear so I can't tell you whether YouTube was able to get rid of minimum guarantees or Sony got some compromises when it comes to how advertising is sold. Equally unclear: whether whatever Sony and YouTube agreed to will be enough to re-up EMI and Universal Musicor to budge Warner Music Group (NYSE: WMG), which was first in on the front end but split with the site late last year.
For an example of why Sony Music signed rather than follow Warner Music Group into a YouTube-less stalemate, go to the Google (NSDQ: GOOG) video hub and search for Avril Lavigne, then look at the "download this song" button for iTunes and Amazon under the Girlfriend video. Check out the overlay ad that pops up when the video plays or the ad button on the video window. Sony, which actually has lost digital market share, needs to sell digital downloads; YouTube has served up more than 115 million streams of this one Sony Music song alone. If even a fraction buy the songand we don't have a legit clue about how many have paid the 99 cents since the program started in Octoberwell, you can finish the sentence.
Add in the rev share from advertising on the page and other Sony artist pages, and an incremental revenue stream could get much bigger. The Sony Music Channel has 93,000-plus subscribers, more than 2.3 million views and, in addition to showcasing Sony artists, offers a way to buy related albums on Amazon (NSDQ: AMZN). Earlier today, YouTube went public with a very small video download-to-own trial; it's not a big leap to think Sony and the others could wind up selling videos in addition to the third-party song sales.
About the advertising rev share ... content providers are concerned about the effectiveness of Google and YouTube when it comes to selling advertising on the site. They want to see improvement and, as one content provider told me, they want to be part of the ad sales discussions, not just the recipient of part of whatever Google sells.
By Staci D. Kramer