News - 10/03/2017

Believe CEO: "I don’t see a YouTube value gap"

Believe CEO: "I don’t see a YouTube value gap"

Believe CEO Denis Ladegaillerie, in an in-depth interview with Music Business Worldwide, touched the topic of YouTube's value gap. His view is pretty simple: indeed, his digital distribution and artist services company earns 20% of its overall revenues worldwide from Google's video platform, and sees it as a vital revenue and promotion tool.

Ladegaillerie explains:

There is no other payout which is significant anywhere other than Youtube for video assets.There is no other significant payout opportunity anywhere else for these assets.

Moreover, Believe's boss instead of persecuting YouTube users with takedown notices, decided to has employ 50 people worldwide to build technology that finds and monetizes videos featuring music within Believe’s catalogue:

It requires investment, but it’s an investment which pays out very significantly, Globally, the revenue-to-cost ratio makes a lot of sense.

He also adds:

If you look at the per-stream revenues of what Spotify is paying for a premium subscriber and then what YouTube is paying for the use of music on a user-generated or official music video then yes, there’s a difference. But you only call this a ‘value gap’ if you think these two things are comparable. They are not comparable. How does it make sense to compare the payout for me using ‘Bohemian Rhapsody’ to soundtrack one of my home vacation movies, to listening to ‘Bohemian Rhapsody’ on Spotify? It’s not the same usage. Should the payout be different? Absolutely. Over 45% of our revenue from YouTube is for the use of music on user-generated content. It’s a lower value use of music than a full audio stream. I don’t see any value gap there.

And, talking about the future of major labels, he says:

The past 15 years have been all about the consumer moving from buying CDs, to piracy, downloads, then streaming. I think that story is pretty much over as the market continues growing. The next 10 years will be about the restructuring of the relationship between the artist, labels and distributors. The market is transforming from a copyright-based model to a service-based model [allowing artists to keep hold of their copyrights].

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