Peter Ruppert's Blog

Universal and YouTube have been in the press again. This time it’s about the possibility of a stand-alone music video site using a YouTube API to monetize music. The central premise is that music is a powerful generator of traffic.

The reality is thatincome comes courtesy of the blockbuster artists, not the long tail. This is not unlike TV where the biggest shows generate the highest ad revenue. With YouTube it’s not the site itself that’s buzzing but the hot properties within.

Take for instance the Universal Music channel. It holds 9,315 videos and has about 630,000 subscribers making it the most popular channel. Its most viewed video has generated 84 million views and the runner-up about 40 million views. Roughly 800 videos have more the 1million views. The typical “favourite” score for a video around 1m is 6,000. The remaining 8,000 or so clips are either new or in the long tail.

So, there are 1,000 clips that work well but of them only a few hundred are a daily attraction. Whilst these figures look large they are relatively small in context.

Take radio for instance. Music radio lives through the attraction of music and artists but its numbers are far bigger. When Chris Moyles plays a tune on his breakfast show he’s pushing the track to 6 million people at once. A few more spins during the week and a track will have enjoyed an exposure to 25 million people in a matter of days. Equally, commercial radio through its generally high rotation policy achieves similar numbers.

There is little doubt that eventually online broadcasters like YouTube will make serious money for themselves and labels will share in their good fortune but that will require more time and innovation.

What the industry needs in the meantime are more blockbuster artists. A look at this month’s PopScores compared to 18 months ago shows how dependent the industry is becoming upon a relatively small number of artists. Only a few still have the capacity to attract and maintain a level of emotional connection sufficient to generate a prodigious financial return. Pink, Take That, Kings Of Leon, The Killers, Rihanna and Leona Lewis are some of those that can, being truly in the hearts and minds of consumers.

Propensity to purchase new music by Males (%) March 09

If we go deeper and look at purchase propensity we find that there are currently only 9 artists that have a new music purchase intention score above the mass market benchmark of 20%. What’s more, 5 of those artists are in the 13-19 year old age group which is obviously a low purchasing segment. Only Oasis, Kings of Leon, Michael Jackson and U2 seemingly have mass market appeal with males 20 years old+. There are no artists in the 40+ age groups that score 20%.

Amongst females, the situation is even more heavily skewed towards teenagers - of the 10 artists that currently have purchase propensity scores of 20% and above, 8 appeal exclusively to 13-19 year olds. Only 2 artists – Take That and Pink – achieve above benchmark in the older age groups.

Propensity to purchase new music by Females (%) March 09

Propensity to purchase new music by Males (%) Sept 07

Propensity to purchase new music by Females (%) Sept 07