YouTube has become an important source of income for many in the music industry, but behind the scenes, there is a complex royalty system powering it all. Understanding how your music earns money on YouTube (and how to collect those royalties) is essential for any independent artist or songwriter looking to take control of their career.
Millions of videos are uploaded to the platform daily, making it virtually impossible for rightsholders to keep up with the high number of licensing requests. Instead, blanket licensing is used to simplify the process and ensure rightsholders get paid. Still, it’s a complex system and can get confusing.
Before we continue, let’s be clear – there is no royalty created specifically for YouTube. Instead, playing a monetized YouTube video generates ad revenue, from which royalties get paid out to rightsholders who claim the monetized video. Need to brush up on the different types of music royalties? Check out this OCM Academy post. Now let’s talk through the different types of royalties that your original music and video content can generate on YouTube.
Let’s say you have a YouTube channel, upload your own videos, and you meet YouTube’s threshold for monetization, which is based on your number of subscribers and total watch time. At this point, you can begin running ads on your videos. Ad revenue is how the platform pays copyright owners! Remember, original works of authorship are protected by copyright – that includes each original video you upload. A portion of that ad revenue is paid out as a video royalty, earned when others watch your videos.
So what happens when a monetized video (uploaded by you or someone else) contains your original music? A micro-sync occurs when a piece of music is synced with the visuals of a YouTube video (or other small-scale content, like on social media). If that music is protected by copyright, and depending on how the music is used, there are multiple music royalties that may generate in addition to the video royalty, including:
A sound recording royalty
A mechanical royalty and a performance royalty for the song composition
Like video royalties, music royalties are paid out from the total ad revenue generated on a monetized video. BUT, here’s the kicker: music royalties are only paid when a rightsholder claims a video containing their music. Royalties are also paid for any videos viewed by users with paid subscriptions like YouTube Music Premium and YouTube Premium. No music royalties are paid for (1) videos that are not monetized, and (2) monetized videos that have not been claimed.
Okay, but how can you keep up with who is using your music? How do you which monetized videos to claim when there are literally millions uploaded every day? This is where YouTube Content ID comes in.
Content ID is YouTube’s automated system for content claims. Developed by Google in 2007, this digital fingerprinting system enables copyright owners to more easily find where their work has been used. The Content ID system takes your reference files (audio and/or visual) and stores them in YouTube’s digital reference library. The system can then compare these reference files against videos uploaded to YouTube to detect when your music has been used. It can even detect melodies! If someone, for example, uploads a cover of your song or a video of your live performance, Content ID will detect it.
When Content ID detects videos that use your music, the system gives you three options:
Track the video’s analytics – offers valuable insights on viewer data, such as where around the world the content is popular
Block the video – this issues a copyright strike against the uploader, which can lead to the video being taken down
Monetize the video – this is how rightsholders can claim their work and begin receiving royalties from ad revenue
There are several ways to collect your royalties generated on YouTube, and there are a ton of organizations that offer Content ID services and can register your music and collect YouTube royalties on your behalf:
Royalties can be directly collected through a Google AdSense account.
For song compositions:
PROs and publishing admins can collect performance royalties – paid to songwriters and publishers
MROs and publishing admins can collect mechanical royalties – also paid to songwriters and publishers
Publishers collect these royalties on behalf of their signed songwriters.
For sound recordings:
Distributors that offer Content ID services (TuneCore, DistroKid, CD Baby, etc.) can collect sound recording royalties.
Record labels collect recording royalties on behalf of their signed artists. It is also common for a label to have ownership of original videos uploaded to their artist’s YouTube channel (like music videos) and collect the video royalties for these, too.
Third party Content ID service providers are yet another way to collect these royalties, including companies like Audible Magic, FUGA (formerly AdRev), Symphonic, Identifyy, and many more.
Monetizing music on YouTube is both an opportunity and a challenge for independent artists and songwriters. Whether you’re uploading your own content or your music is being used by others, understanding how YouTube’s royalty system works is key to making sure you get paid for your work.
Need more help with YouTube? Check out the YouTube Help center and community!
