Warning: file_get_contents() [function.file-get-contents]: URL file-access is disabled in the server configuration in /home/content/64/4948964/html/gadsen/wp-content/plugins/digg-digg/include/dd-class.php on line 1731
Warning: file_get_contents(http://feeds.delicious.com/v2/json/urlinfo/data?url=http%3A%2F%2Fgadsenrecords.com%2F2012%2F08%2Fthe-youtube-dilemma%2F) [function.file-get-contents]: failed to open stream: no suitable wrapper could be found in /home/content/64/4948964/html/gadsen/wp-content/plugins/digg-digg/include/dd-class.php on line 1731
Back in January 2011 in my Midem address I posited that YouTube was digital music’s Killer App with about 25% monthly user penetration across all European adults in 2010, up a few percent from 2009. I also explained that penetration for the under 25s was about double that. The most important point though wasn’t the scale of adoption, but adoption relative to other digital music activities: the next most popular digital music activity was P-to-P (with about half the adoption rate of YouTube) and paid downloads were fourth with a paltry 11%. The key takeaway was that YouTube is succeeding with digital music adoption where other services were not, that YouTube had got something right from a user experience perspective that others hadn’t, and that the industry should do a better job of understanding YouTube’s popularity.
19 months on and the latest Nielsen stats reveal it is still the same story. In some quarters it’s being viewed as a dramatic sea change in the balance of digital power. It isn’t of course, instead it is the successful consolidation of a market leading position by YouTube. Some of this has happened organically but much is down to sheer hard work by YouTube.
Since my 2011 Midem speech, YouTube have upped their game strategically, adding functionality and investing heavily in content channels. They’ve done so largely because of the V word…Vevo. Vevo may have its challenges but strategically it was a master stroke by Universal Music: start pull the best music video out of YouTube, put it into an interface that is so deeply integrated into YouTube that it just feels like another YouTube channel to users, and all the while have YouTube deliver the audience. Unsurprisingly YouTube got nervous, particularly when Vevo started ruminating on taking the service out of YouTube entirely and into Facebook.
YouTube is No MySpace
Music matters massively to YouTube: they kick started the online video revolution with short-form video clips, but the momentum firmly shifted to mid-form video providers like Hulu and iPlayer. If you scraped music video away YouTube was left with skateboarding dogs and ‘Charlie Bit My Finger’. Hence YouTube’s investment in features like playlist functionality and $200 million in original content channels. Back when MySpace was beginning to lose ground to Facebook I suggested that MySpace should stop pretending it was a social network anymore and start focusing instead on being a platform for bands and their fans. They didn’t and they ended up losing out on both counts. YouTube, to their credit, have recognized what their strengths are and are playing to them.
Why YouTube is Still Music’s Killer Digital App
YouTube is still digital music’s killer app because:
- It’s free. Of course so are Spotify and Pandora et al but YouTube is free and fully on-demand everywhere. If you want Spotify on your iPhone you have to pay £/$/€9.99 to do so, but you can listen to unlimited on demand YouTube music for free on the iPhone, it’s even integrated into iOS (for now at least). In fact nearly two thirds of iPhone users use the iOS YouTube app.
- It has all the catalogue in the world, and more. Because of the way YouTube entered music content licensing through the back door in the days before its acquisition by Google by selling stakes to the major labels, YouTube has ended up with effectively being given clearance for much much more content than every other licensed music service. Granted YouTube have since implemented a largely effective takedown process, but the fact that YouTube’s catalogue is music uploaded by users means it doesn’t have the same restrictions other services do, such as territory restrictions, music not yet being officially available digitally etc. If there’s a piece of music in the world then the odds are it is on YouTube. Which cannot yet be said of other music services.
- It just works. YouTube is available wherever you are in the world (in the main), on whatever device you own, and you don’t have to register or sign up. It also has effective discovery tools such as user votes, comments and collaborative filtering, and features like playlists.
- You can download to keep too. Streaming ripping might not be part of the official YouTube featureset, and recent action has been taken to block one such service, but there are dozens of stream ripping apps out there and they are actively used by a meaningful share of regular YouTube users.
- It’s an audio visual experience. And of course, YouTube is so much more than music. It’s an interactive, social, audio visual experience designed for the digital age. Whilst most other licensed music services have little or no video.
It would be pretty hard to compete against that combination of features if it had a 9.99 price tag on it, let alone when all of that is available for free, to all consumers in virtually every territory in the globe. Which brings us to the YouTube dilemma.
The YouTube Dilemma
YouTube is simultaneously the most important licensed digital music service on the planet and one of the biggest challenges to all the other licensed music services. It used to be that YouTube was clearly a discovery mechanism, and indeed it still is, but it is now also firmly a consumption vehicle. YouTube has become both the journey and the destination rolled into one.
Of course there are plenty of music fans who use YouTube as a complement to buying music or subscribing and as a means of finding and sampling new artists. But plenty more use it instead of those other options, particularly those young Digital Natives who value free, convenience and ubiquity over audio quality.
So the music industry has a difficult balance to maintain, between ensuring the most valuable digital discovery asset it has its disposal remains vibrant, but at the same time ensuring it doesn’t hinder the opportunity for services which generate much higher revenue per user.
YouTube and parent Google can do a lot to help. They can accelerate their focus on making YouTube’s content unique with further investment in live concerts, exclusive sessions etc. More importantly they can more deeply integrate with paid music services. (And if integrating deeply with Apple and Spotify might be a step too far then this should be the development path for Google’s music strategy.)
Meanwhile the music industry can help redress the balance too. YouTube has defined what the mass market digital consumer expects a music service to look and feel like: namely it needs to have video, work seamlessly on all devices (not just 1 extra device at a time), and have social features. YouTube has set the blueprint for the next generation music product, the industry now needs to pick up the baton and transform that prototype into a high quality, premium product.