Piracy is often cited as the main culprit for the decline in music sales. But it turns out that YouTube
has also played a part. Back in 2009, Warner Music pulled all its music from YouTube because of
a licensing dispute. Based on the blackout, researchers from Fairfield University and the University
of Colorado determined that YouTube cost the label up to $40 million in lost album sales per year.
“We showed that the removal of content from YouTube had a causal impact on album sales by
upwards of on average 10,000 units per week for top albums,” the paper from the study reads.
For each of the top 200 albums the study examined, the total lost in sales because of YouTube
amounts to roughly $1 million per year.
This is more evidence that streaming music is killing sales. Even though digital downloads brought
in the most revenue to the music industry last year, a 1% decline to $2.4 billion suggests that people
are moving away from purchasing music and moving toward streaming services like Spotify, Beats
Music, Slacker, Rdio, and Pandora.
Now, that's not to say that YouTube serves no benefit to the music industry, given that labels still receive
a lot of money through advertising on YouTube. And for smaller artists, YouTube is a great way to reach
a massive audience. But for top artists, YouTube's role in promotion and discovery may not be as relevant.
Source: Business Insider