Ok Go Singer Explains How Lack Of Embedding Videos Hurts Everyone

from the embed-me dept

As he's done before, Ok Go's lead singer Damian Kulash has taken to the NY Times Op-Ed pages to discuss the fact that his own record label seems a bit clueless. Basically, he's repeating what he said a few weeks ago on the band's website, claiming that YouTube only pays royalties on videos streamed on site, rather than embeds (someone from YouTube told me this is untrue, but when asked for specific confirmation I got no response). However, what is interesting, is that Kulash highlights two things:
  1. Their original video (the treadmills one) was made entirely on their own outside of EMI's influence, and the success of that video has helped make EMI and the band a lot of money:
    In 2006 we made a video of us dancing on treadmills for our song "Here It Goes Again." We shot it at my sister's house without telling EMI, our record company, and posted it on the fledgling YouTube without EMI's permission. Technically, this put us afoul of our contract, since we need our record company's approval to distribute copies of the songs that they finance. It also exposed YouTube to all sorts of liability for streaming an EMI recording across the globe. But back then record companies saw videos as advertisements, so if my band wanted to produce them, and if YouTube wanted to help people watch them, EMI wasn't going to get in the way.

    As the age of viral video dawned, "Here It Goes Again" was viewed millions, then tens of millions of times. It brought big crowds to our concerts on five continents, and by the time we returned to the studio, 700 shows, one Grammy and nearly three years later, EMI's ledger had a black number in our column. To the band, "Here It Goes Again" was a successful creative project. To the record company, it was a successful, completely free advertisement.
  2. Once EMI disabled embedding on that video, the number of views dropped drastically, harming everyone's bottom line:
    When EMI disabled the embedding feature, views of our treadmill video dropped 90 percent, from about 10,000 per day to just over 1,000. Our last royalty statement from the label, which covered six months of streams, shows a whopping $27.77 credit to our account.

    Clearly the embedding restriction is bad news for our band, but is it worth it for EMI? The terms of YouTube's deals with record companies aren't public, but news reports say that the labels receive $.004 to $.008 per stream, so the most EMI could have grossed for the streams in question is a little over $5,400.
Now, I'll quibble with Damian's final point there. First, it's still not entirely clear if it's true that YouTube doesn't pay for embed streams, but even if that's the case, I'd argue that of the 10,000 views per day, it also increased the number of direct views (I quite frequently will click through on an embedded video to see it at YouTube itself -- often to see more about who posted it, or sometimes the comments on the video). Second, if you recognize that embeds and things that get passed around are quite a bit like radio used to be, you have to imagine that some percentage of the 10,000 streamers per day went on to buy something from Ok Go that resulted in EMI making money. Cutting that by 90% just doesn't make any sense. Perhaps it's no wonder that EMI is on the verge of going out of business.

Damian does go on to claim that record labels are an important part of the business in funding new acts, and helping them do more expensive things early on, while aggregating risk. Indeed. I don't deny that at all -- and, as I've said plenty of times before -- there's still a place for labels that wish to do things like that. The problem is that the labels have set up their business models to rely on a single revenue stream, album sales, that is increasingly less important. The rest of the music ecosystem is thriving and will continue to do so, and if it's not the old record labels giving advances and aggregating risk to promising bands, others will step in to fill that gap. There's too much opportunity and too much money for it not to happen.


Reader Comments (rss)

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  1.  
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    Ima Fish (profile), Feb 22nd, 2010 @ 8:01am

    "Ok Go Singer Explains How Lack Of Embedding Videos Hurts Everyone"

    Everyone but the corn farmers.

     

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  2.  
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    Marcus Carab (profile), Feb 22nd, 2010 @ 8:14am

    The point about YouTube embeds makes me wonder what the rates actually are for clickthroughs to the site, and what sort of embedded videos generate the most direct traffic.

    If it's true that royalties are only paid on direct views, then content creators should be focusing on giving people good reasons to head to YouTube - in many cases it could be as simple as a quick "See our channel for more" bump at the beginning/end of a video, but it could get more creative with contests in the comments or something like that. YouTube could provide people more tools to do this too, ultimately benefiting everyone.

    Or everyone can just disable embedding. I'm sure that will work just as well.

     

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  3.  
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    Brooks (profile), Feb 22nd, 2010 @ 8:24am

    Um...

    Mike, you're so used to arguing with everyone that you seem to have missed the fact that Damian is entirely in agreement with you here.

    That last point you're "qubbling" with? His original point says exactly what you are attempting to dispute: by prohibiting embeds, EMI could have made at most $5400, which is a pathetically small figure and far less than that much promotion should generate.

    I can only think that you read $5400 as a large figure and thought that Damian was saying that was an upside for EMI. In fact, he's saying the opposite, and you're somehow arguing a point where you two are in agreement.

     

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  4.  
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    Skeptical Cynic (profile), Feb 22nd, 2010 @ 8:28am

    Can someone explain this to me?

    In what world is free advertising bad?

    Sure when I give an interview about my business to a newspaper and people buy that copy because of the interview someone else makes money off of my interview other than me, but I get free advertising!

    Sure I let some website see my product before it is for sale and then they talk about it and thus make the money not me. Which again is free advertising.

    I just really don't understand how any business model WOULD NOT include giving everyone and anyone the opportunity to talk about your product. Sure it has to make bottom line sense who gets free (but costs the company)stuff but when you product is "infinite content" I would think that giving everyone every chance to talk about it and then maybe buy it would be pretty high up on the marketing agenda. Internet buzz is worth A LOT more and MUCH cheaper than a 30 second commercial on the local evening news.

     

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  5.  
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    scarr (profile), Feb 22nd, 2010 @ 8:50am

    Re: Um...

    That paragraph combines two different points in a possibly misleading way. I'm pretty sure Mike's only quibble was that the embeds didn't take away from the YouTube site views, but added to them.

    The loss of overall business from cutting out free advertising is a point Mike often makes, and Damian clearly made in his article.

     

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  6.  
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    mertz, Feb 22nd, 2010 @ 9:14am

    i just finished reading this (saw a friend from mtv link to it on her twitter so it's making rounds amongst the music media)and it's basically everything that's been discussed on this website. i'm actually sending you some more information from another music industry person who's also noting the same thing, but from a boss/management perspective. it's really interesting to just be an observer to all these changes coming about because of the internet, and better technology that isn't being fully adopted because some people are behind the times (generational thinking)and some aren't. i just finished hearing an interview from a long time female broadcastor who started out writing for shows in the 70's and then went on to being the main lead journalist, and to hear all these oldies talking about how times have changed so much that unless they and their management/big corporations and their bosses adapt, their careers, the medium they chose to follow and be a part of is all in danger. what's really sad about this, what's happening with the music industry and all other kinds of publishing industries for original content, is that there are some people who are all for moving forward in a big way, then there's the people who want to move tentatively and are curious about the future and what the internet/technology can do, but then there are some dipshit, established, old farts, as well as some young farty business people who buy into that type of mentality, who are stubborn as all reason and just are against change, but yet the change happens otherwise. it's hilarious and really sad, but sometimes enlightening to be an outside observer to all of this. now i'm going to go and tell my friends to reconsider journalism school, or thinking about signing record deals that puts them completely at the mercy of a big record company like universal. indie/diy has never seemed cooler.

     

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  7.  
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    Hulser (profile), Feb 22nd, 2010 @ 9:21am

    Record companies' and bands' futured tied together?

    "If record companies can’t adapt to this new world, they will die out; and without advances, so will the futures of many talented bands."
    - Damian Kulash Jr

    This is the point that I have a quibble with. Kulash appears to see the problems being faced by the big recording companies, but then misreads the solution. He's saying that the fates of both big music and musicians are inextricably tied together. But as his band proves, you can promote your band without a huge bankroll. If he doesn't want to or doesn't know how to monetize the attention from his videos, fair enough, but that doesn't mean that big music is the only ones that can do this. In short, if record companies can't "adapt to this new world", they will die out, not the talented bands.

     

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  8.  
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    Anonymous Coward, Feb 22nd, 2010 @ 9:29am

    Re: Can someone explain this to me?

    The problem is that the record companies have decided that nothing involving music is advertising, and all of it should be paid for. This includes videos, which used to be for promotion. They never see a down side in charging things into oblivion.

     

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  9.  
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    Michael, Feb 22nd, 2010 @ 9:30am

    Re: Record companies' and bands' futured tied together?

    "He's saying that the fates of both big music and musicians are inextricably tied together"

    No, he is saying that the fate of "many talented bands" is tied to the big music companies. I would have to agree with this. Although you CAN self-promote and build a business around your own band (with the help of technology) these days, many bands will need help with this. At the moment, the big recording companies are really the source of this "help".

    I think what he is saying is that if they can get their act together and help new bands come up with workable business models, everyone will be better off. If they don't, the gap between the reign of these big companies and up-and-coming companies that do "get it" will result in a lot of great bands never getting off the ground.

     

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  10.  
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    Hulser (profile), Feb 22nd, 2010 @ 10:26am

    Re: Re: Record companies' and bands' futured tied together?

    I think what he is saying is that if they can get their act together and help new bands come up with workable business models, everyone will be better off.

    That's a mighty big if. It's like saying, if a fish were a chair, it would be a chair. The if is so big in fact that it's all but irrelevant to this discussion. The future of music, the solution that is truly going to make everyone better off, isn't going to include a company that will be recognizable as what the big recording companies are today.


    If they don't, the gap between the reign of these big companies and up-and-coming companies that do "get it" will result in a lot of great bands never getting off the ground.

    If that's what he really meant, I would agree. Your interpretation makes sense, but based on the tone of his editorial, I still think that's he's placing too much faith in the record companies, relying on them to solve the problem instead of the up-and-coming musicians themselves or news businesses that can help the up-and-coming musicians.

    Also, so what if the recording companies fail and the "many talented bands" who put their faith in them never get off the ground? Since when has there been a shortage of talented bands? The issue is not whether thousands of bands will fail. That's happned ever since there have been bands. The question is will there be a shortage in the marketplace of music made by great bands. My opinion is that even if every record company in the world were to disappear today, there would still be plenty of really good music to listen to out there.

     

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  11.  
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    Mike Masnick (profile), Feb 22nd, 2010 @ 10:28am

    Re: Um...

    Mike, you're so used to arguing with everyone that you seem to have missed the fact that Damian is entirely in agreement with you here.

    I know that.

    That last point you're "qubbling" with? His original point says exactly what you are attempting to dispute: by prohibiting embeds, EMI could have made at most $5400, which is a pathetically small figure and far less than that much promotion should generate.

    Right. I recognize what he's saying -- I just think he should point out how they could have made much, much more than that tiny amount. The "quibble" is in not showing the ancillary benefits as well, even if he implied them.

    I can only think that you read $5400 as a large figure and thought that Damian was saying that was an upside for EMI. In fact, he's saying the opposite, and you're somehow arguing a point where you two are in agreement.

    Uh, no. That's not what I meant at all. $5,400 is nothing in this context.

     

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  12.  
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    Sneeje (profile), Feb 22nd, 2010 @ 11:13am

    Re: Re: Record companies' and bands' futured tied together?

    The other thing that is missed here is the implicit presumption that the current situation optimizes the recognition and promotion of talented bands. Or, to say it differently, do we really believe there are no bands missing out on being discovered under the current regime?

    So, yes, perhaps the death of large labels will cause some (perhaps many) bands to remain undiscovered and unsuccessful, but is it more or less than now?

     

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