Billboard vs. YouTube | Matt Connarton Unleashed

0:00 Speaker 1: Industry news.

0:00 Speaker 2: Hopefully it's interesting to you music business worldwide reporting that Billboard just made free streams worth more on its US charts. YouTube is not happy and is pulling its data. So Billboard, of course, you know, they've got their their various charts. I used to love when I was a kid, because I was a music industry nerd, probably starting in high school.

0:27 Speaker 2: I would I remember going to the school library and I would always look for the newest Billboard magazine and I would read that. That's how much of a music industry nerd I was from a very young age. You know, obviously I played an instrument and I was into playing music, but I was also very fascinated by the music business. So I would read Billboard. I wouldn't necessarily read it cover to cover. There's some things I wouldn't necessarily pay attention to, but I always like to look at the charts.

0:51 Speaker 2: You know, you've got the Billboard Hot one hundred, and you've got you've got all these different charts in Billboard. And of course now you can access it all online if you have a subscription, which I don't because I'm not gonna spend that money. But but the way that billboards. So the way that Billboard used to back in the day, back in my day, the way that is, you know, what would go into the into calculating the chart positions would be metrics like sales, because back then singles would you know, you would have singles.

1:25 Speaker 2: You would have you had Vinyl forty five records if you go way back. But of course you also had cut singles. If you remember cus singles. I was in a band called the Jenkston We used to joke that we were going to release a single.

1:37 Speaker 1: We never did.

1:38 Speaker 2: And of course you had CD singles and so forth, so you had single sales, but you also of course had radio airplay. Radio airplay would play a big role in how Billboard would calculate the charts, and I'm sure it still does obviously. But and also MTV. I don't know if but I don't think MTV. I don't think rotation of a music video on MTV was ever a part of the data that Billboard would use. I could be mistaken about that, but I don't think that it was. I don't think they ever.

2:12 Speaker 1: Used that data.

2:14 Speaker 2: As far as the charts, I think it was all airplay and sales, not not MTV or VH one or anything like that. Again, I'm pretty sure I'm right about that. But but so today it's all different, right, because we have the Internet. So today things that go into Billboard charts are things like, uh, you know, how many people are listening to a song online?

2:34 Speaker 1: Radio airplay is still, of course a big part.

2:35 Speaker 2: Of it, but but online, what's happening online? You know, it's much more complicated now, right, It's it's because it used to be. If you're if the only data points you're using are you know, you can have a concrete number you can look at, right, how many did this track sell in terms of singles?

2:55 Speaker 1: How many did it sell in the stores?

2:58 Speaker 2: And you know radio stage when they report their playlist data, you know how many spins did this get? Okay, these are these are metrics that we can use and calculate, and you know they have whatever formulas they use, obviously one ways more than the other. But but you figure it out, right, you have hard numbers to look at, and I guess you still have hard numbers to look at. But now it's like streaming, you know, and you've got many different streaming services and it's a lot, right, So it's all much more complicated now.

3:29 Speaker 2: One of the ways that people access music to listen to his YouTube. It's the easiest way, you know. You can go on YouTube finds us about anything. You're not going to get as high a quality file as you would if you actually purchase a wave file or an MP three. A wave sounds better than an MP three, a CD sounds better than either one, and a vinyl record sounds better than all of it. But but you can go on YouTube and just listen to music, and that's what a lot of people do. That's how a lot of people discover new music is YouTube.

4:02 Speaker 2: So here's what's happening. Just give you some context for what we're talking about here. So getting back to the story, so YouTube says again this is from music business worldwide dot com. YouTube says it will soon stop providing data to Billboard for inclusion in the US charts, ending a partnership that has lasted more than a decade. The decision, announced on December seventeenth by Lee or Cohen, YouTube's global head of music, comes just one day after Billboard revealed changes to its chart methodology that will actually narrow the waiting gap between paid and ad sponsored streams, So the waiting gap, and I did refer to it, but so different metrics have different weight, so you might have However, many paid streams might have a certain weight AD supported streams which are free.

4:58 Speaker 2: You know, like if you you go to listen to a song on YouTube, but before you can actually hear the song, you've got an AD that you have to click skip on, or you have two ads, one you can't skip and then the second one you can. That's usually how it seems to go, right, So that's an AD supported stream, So that's free. So in theory, paid streams would weigh more if you're calculating where on the chart this track is gonna go, this single, you're gonna you know, because people who are actually paying for the stream or for the track, I should say, people are like if they're paying to download it, for example, then you know they might care about it a little bit more than people who are just going on YouTube and listening to it for free, so you weigh that.

5:41 Speaker 2: So so they've narrowed the gap between in terms of what each of those metrics weighs paid versus free Essentially okay, under Billboard's current formula for the Billboard two hundred. One album unit equals two hundred fifty paid subscription streams or three thousand, seven hundred and fifty AD supported streams, a one to three ratio Billboard's new methodology announced yesterday, Well, this was this one up a few days ago. Announced on December sixteenth, Titans that ratio to one to two point five, with one album unit now equally one thousand paid streams or twenty five hundred AD supported streams.

6:26 Speaker 2: The same ratio is being applied to the Hot one hundred chart. In other words, paid streams. This is the This is the important part. Paid streams will still be weighted more favorably than AD supported plays, but by a smaller margin than before.

6:44 Speaker 1: That's interesting.

6:46 Speaker 2: Yet, in a statement today Lee or Cohen said the changes do not go far enough YouTube.

6:52 Speaker 1: This is why YouTube is not happy.

6:55 Speaker 2: YouTube wants all streams to be counted equally on Billboards charts, regardless of whether they come from paid subscriptions or add supported services. Before we go any further what Cohen said, let me just say this. I would think that that would be a hell of a lot easier for Billboard.

7:16 Speaker 3: Right because if they did it that way, if they took his his suggestion, just stop giving anything more weight than anything else.

7:26 Speaker 2: You just count it. You just count it all. Just the numbers are. What the numbers are. You count it all. You add it up. There's your numbers. Because it just seems like it would be a lot easier. Now, maybe maybe I say that because as someone who's not good at math, I want math and numbers to be easy. That's my natural I have a natural impulse. I have a bias there, right, I want I always want math and numbers to be easy, because I'm not good at math. But you know, it does seem like it would be simpler, right, It'd be a lot more efficient.

8:03 Speaker 2: I mean, they still I can't imagine how many data analysts Billboard has working for them. I'm sure it's a lot. But here's what Cohen said in his statement. Though, he said quote Billboard uses an outdated formula that weights subscription supported streams higher than ads supported. This doesn't reflect how fans engage with music today and ignores the massive engagement from fans who don't have a subscription. We believe every fan matters and every play should count equally. Therefore, after January sixteen, YouTube data will no longer be delivered or factored into the US Billboard charts unquote.

8:50 Speaker 2: Now, in thinking about that, how does that affect How does that affect artists and.

8:58 Speaker 1: Labels and.

9:00 Speaker 2: Everybody who has music streaming on YouTube? Well, if you're getting a lot of streams on YouTube or at well here's here's something. What if you're an artist who does not put your music on Spotify because you're mad about how little Spotify pays out, which is a whole other subject. I'm not trying to take that side street, but I'm just it works for this example. Say you're an artist and there's a lot of them. There's both established artists who pulled their music from Spotify because they're mad, and there's independent artists.

9:35 Speaker 2: There's small artists who just don't want to put their music on Spotify, which I personally think is a mistake. I think you should still put your music on Spotify, even if you're not happy that they don't pay you anything. Because discoverability is a term that I like to use and that we use in the industry that you have to make your music discoverable in order for people to discover it. So you want to be in as many places as possible. That's my philosophy. Some people disagree. We've had guests on the show show who disagree.

10:00 Speaker 1: That's fine. But what if you're not on Spotify for.

10:05 Speaker 2: Whatever reasons, whatever your reasons are, and so YouTube is your fallback. YouTube is where people are gonna find you and you want to be charting. Now, if you're an unsigned or small independent artist, you know you might maybe it doesn't matter to you because you know that you're not going to chart, you know, unless you get like, unless you blow up, you know, unless you get really big, you're not going to even have a shot at charting in Billboard anyway. So maybe it doesn't matter to you. But if that's the long term goal, it should matter to you.

10:40 Speaker 2: So if you are not on Spotify, or if you are on Spotify, but that's not where you're catching fire. You're catching fire on YouTube. That's where you're getting the spins, the plays spins more of a radio term, but the plays, you're the streams on YouTube. You want those numbers to count, do you not? So this is this is going to upset some people. So let me actually, let me read this from Cohen's quote again, because I just want to make sure. This is the most important thing that he says here. Streaming is the primary way people experience music, making up eighty four percent of US recorded music revenue.

11:27 Speaker 2: We're simply asking that every stream has counted fairly and equally, whether it is subscription based or ad supported, because every fan matters and every play should count.

11:37 Speaker 1: Unquote.

11:39 Speaker 2: YouTube was first included in the Billboard Hot one hundred in February of twenty thirteen. I didn't know that it was that recent. I mean, we're coming up on twenty twenty six, so thirteen years ago, I guess. But still I for some reason I thought it had been even sooner than that.

11:54 Speaker 1: But it wasn't so.

11:56 Speaker 2: And that was probably a big decision on Billboard's part when they when they decided to that. So YouTube was first included in the Billboard Hot one hundred and February of twenty thirteen, and was later added to the Billboard two hundred album chart in January of twenty twenty. Cohen said, quote, after a decade long partnership and extensive discussions, Billboard are unwilling to make meaningful changes. We are committed to achieving equitable representation across the charts and hopefully can work with Billboard to return to theirs unquote.

12:32 Speaker 1: The question.

12:35 Speaker 2: This is interesting. So the question of how to wait differences different types of streams has been contested since Billboard first introduced tiered streaming values in twenty eighteen. Prior to that change, all streams, whether from paid services like Apple Music or ad supported platforms like YouTube, were counted equally. So there was a time when when Billboard was just counting them all equally and not waiting one source of stream versus the other. In a twenty seventeen interview with Music Business Worldwide, Apple's Jimmy Iavine argued that having YouTube streams count equally alongside paid for music on Billboards Hot one hundred disadvantaged artists.

13:22 Speaker 2: Iavine was unequivocal about how his view about his view that paid streams should carry more weight on industry charts. He said, quote, I'll put it this way, people who pay for subscriptions should be advantaged. The labels owe it to their customers. The most important thing for labels is to make the paid services compelling and entertaining, and don't make free services as good as the paid services. Is that not obvious? Unquote, I don't necessarily disagree with his life. I understand the argument that he's making.

14:02 Speaker 2: I think we all can. I just but again, it's it just makes it. I mean, doesn't it make it more complicated? The more complicated you make it too, aren't there more chances for there to be errors? Calculating errors, math errors? Again I'm thinking of I know I'm approaching it with a bias of someone who the bias of someone who doesn't like math. But I'm just saying, I mean, I think it's I think when you try to weight different sources, it just makes it complicated, because then how do you figure out how much you should I mean, you know, obviously Billboard is trying to figure that out now, they're changing how much they weigh certain sources of streams.

14:46 Speaker 2: When the twenty eighteen changes were implemented, paid subscription streams were weighted more heavily than AD supported streams on both charts. On the Hot one hundred, paid streams were given full point value AD supported streams two thirds and programmed streams half On the Billboard two hundred, it took three times as many AD supported streams as paid streams to equal one album unit. Recent data shows that the US recorded music industries. Overall streaming revenue performance in twenty twenty four was dragged down by payouts from on demand ad supported music services, including YouTube and Spotify's Freemium tier.

15:28 Speaker 2: Combined, these platforms saw their revenue contribution to the recorded music industry decline in the last year, down one point eight percent year over year to.

15:38 Speaker 1: One point eight three billion.

15:39 Speaker 2: Meanwhile, on demand paid subscription platforms contributed eleven point six eight five billion dollars to recorded music right soldiers, up four point six percent year over year. The disparity and revenue per stream between paid and free tiers is at the heart of the debate.

15:58 Speaker 1: As Iving said.

16:01 Speaker 2: In twenty seventeen, quote, the fact is that free quote unquote in music streaming is so technically good and ubiquitous that it's stunning the growth of that. It's stunting the growth of paid streaming. Two things have to happen. Free has to become more difficult or restricted, and the paid services have to get better unquote. Well, free is never going to become more difficult or restricted. I mean, that's not going to happen. Ever, Cohen's announcement represents a reversal from twenty nineteen, when he welcomed YouTube's inclusion in the Billboard two hundred, calling it a quote very important moment and making the chart a more accurate representation of what people are listening to unquote.

16:42 Speaker 2: At that time, Cohen said, quote genres like Latin hip hop and electronic, which consistently dominate the YouTube charts, will now be properly recognized for their popularity. This is another great step in bringing YouTube and the industry together unquote. YouTube reports in October that it paid more than eight billion to the music industry during the twelve months from July twenty four to June twenty five, covering revenue from both advertising and subscriptions on the Google owned platform. In his statement December seventeenth, Cohen directed fans to YouTube's own charts as an alternative to Billboard's lists.

17:18 Speaker 2: He said, quote, if you're curious about what music is making waves on YouTube, you can visit our charts.

17:23 Speaker 1: Unquote. Well that's a good point, I guess. So there you have it.

17:30 Speaker 2: The other thing happening very very quickly with YouTube, and this is from Digitalmusicnews dot com. YouTube is reportedly terminating channels behind fake AI film trailers our AI music page takedowns. Next, this is short, but let's do this quickly before we go to break. YouTube has reportedly started terminating some of the channels be behind unauthorized artificial intelligence film trailers. Is a crackdown on AI music accounts coming, though it'll be up to the new year to deliver an answer, we can be sure of two related points at present.

18:08 Speaker 2: First, the video sharing giant has booted screen Culture and k H Studio, a pair of prominent fake trailer specialists, according to deadline from the platform all together, so both those channels have been booted per the same outlet. The terminations followed considerable pushback against the channels, and, while it probably doesn't need saying, said pushback was set in motion by the involved uploads reach and adjacent ability to confuse fans or at a minimum, distract from proper trailers. So, in other words, these channels were making their own custom trailers for movies.

18:45 Speaker 2: Screen Culture allegedly pumped out twenty three fake trailers for the Fantastic four First Steps, with a few outranking the actual trailer itself, boasting around seventeen million views in search results. Long story short, YouTube had reportedly slapped screen Culture and kh Studio with a monetization time out which ended when they started adding disclaimers like fan trailer and parody to their upload titles. But the channels, having reportedly generated a combined one billion or so of views, are said to have reverted to their old ways, an alleged move that then drove the takedowns.

19:29 Speaker 2: Second, we can also state with confidence that there's a massive amount of AI audio inundating DSPs and in the process stealing fans, playlist spots and royalties from real artists. Then we talk about that on the show all the time. The impact that AI is having, as most are aware, allegedly infringing machine made tracks as well as tracks that make too big a commercial splash typically face takedowns and or threats of legal action.

19:57 Speaker 1: In general.

19:57 Speaker 2: However, it's a different story for the advance avalanche of AI songs with comparatively modest stream and view counts. As demonstrated by hard data and Curse Rey DSB searches alike. These creations, while not yet outshining genuine music, are subtily expanding their presence on platforms such as YouTube and Spotify.

20:14 Speaker 1: Well, the thing is.

20:18 Speaker 2: As long as your as long as your channel doesn't get huge, you stay under the wire.

20:23 Speaker 1: If you under the radar would be a better way of putting it right.

20:26 Speaker 2: So, if your channel gets too big, you might get, for example, you might get copyright claims or I'm sorry, copyright strikes. Copyright claims are one thing, copyright strikes or another. You don't want copyright strikes. You can get copyright claims. I get copyright claims all the time. I put you know, this radio show streams on YouTube, and obviously we're playing copyrighted music. I can never monetize this, that's fine. I can never monetize the show on YouTube, that's fine. Couldn't do that anyway.

20:52 Speaker 2: It contains advertising. I don't care about that. I'm just streaming it to YouTube as it just gives people another way to enjoy the show. They don't they don't block my videos, they just won't ever let me monetize them.

21:03 Speaker 1: And again I'm fine with that.

21:05 Speaker 2: But if if I got big enough where you know, a label, I mean, I'm I'm a small time. But if I were like this huge, I mean, if I were big enough, I wouldn't I would just not stream the show on YouTube anymore because I would know because I would see what was coming. Right, if I were big enough that I got the attention of the labels, they you know, somebody might issue an actual copyright strike, and a copyright strike would put my channel in danger. So I wouldn't do that. You know, I'm at a level where I you know, I do it.

21:37 Speaker 2: It's fine, I get copyright claims, but that just means you can never monetize this video. Fine, I can't monetize any of them. It's fine.

21:46 Speaker 1: But but if you get.

21:49 Speaker 2: Big enough, YouTube notices or someone notices who will then complain to YouTube effectively, and then YouTube will begin to penalize you. You know, the first might be just demonetizing you. If you have a big channel. That's if you're monetized and you're making money, you know, you don't want to lose that. That's the first thing YouTube might do to you is demonetize your channel. Instead of just demonetizing specific videos, they might demonetize your entire channel, and then you've just lost a source of income.

22:17 Speaker 2: And then the next step might be they're going to take you down. There's a lot more to this. The article itself is short, but we're we're getting to that point. Where we got to hit a commercial break