YouTube For Musicians: How Is The Money Made?


(1)In this informational piece, we go over the details of just how exactly it is that original content posted to YouTube translates into income for bands and artists, the important role which ads play in this process, and what exactly you need to know to make the most money you can from the popular video sharing service.

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Guest post by Nicholas Salamone of DIY Musician

So, what is YouTube monetization?

Monetization on YouTube is the process by which original content makes, you guessed it, money. That original content can come in various forms, including:

  • audio sound recordings
  • audio compositions
  • visual content
  • or (the perfect marriage of audio and visual) the music video

This content can be uploaded by individual users as unique videos or as separate audio/visual “assets.” Audio and visual assets are uploaded separately in order to be eligible for Content ID, the process by which copyrighted material is correctly identified from among all the content uploaded to YouTube, and claimed by the appropriate rights holders.

The separate delivery of audio and visual assets makes your content more likely to be found within user-generated videos (videos that you are not creating yourself) or on YouTube Red.

So, if you’ve submitted your music to a YouTube Content ID service (such as CD Baby’s YouTube Monetization program) your music will be uploaded as sound recordings and compositions by your rights administrator and any videos using your original music will be identified, claimed, and monetized on your behalf.

What does monetization mean to you?

2Well, if you are a YouTuber creating videos and uploading them to your channel, then you can set those videos to monetize and begin making money off the ads that are served on your videos. In order to do this, you first need to make sure your video content meets the YouTube Community-Guidelines for Advertiser friendly content.

Next, you need to sign up for an AdSense Account and decide which ad types you are willing to have shown on each of your videos. AdSense is the service that connects advertisers with applicable content and, once ads are served on that content, charges the advertiser and pays the person whose content was used to run their ads.

And if you are a video creator or musician who is using a content administration service, that company will monetize your content on your behalf and collect all revenue via their AdSense account before distributing your earnings directly to you.

Not all ads are created equal…

Ads on YouTube are placed via the AdSense Auction. This is where the content is linked with the specific advertising.

The auction process is almost all automated based on things like:

  • demographic
  • video type
  • channel
  • and (most importantly) number of views

Essentially, advertisers sign up and set policies for how much they are willing to pay for videos with certain levels of viewership, and within these policies are the ad types they would like to run (pop-up, skippable pre-roll, non-skippable pre-roll). So, if you post a video, or you have content in a video, that gets a meteoric rise in views for one reason or another (which is the dream), you will see that video progress through the ad types as the views continue to rise. And it should go without saying that your revenue will reflect this positive trend.

Another option would be to have you content used or reposted by a large channel, which will serve the most lucrative form of ads from view #1 because they are a channel with enough daily viewership that advertisers are willing to pay without seeing proven success by any one particular video. And, just to demonstrate how complex this whole thing can get, each ad will pay out $$ from the advertiser not only based on the type of ad, but also on how much of the ad was viewed before it was most likely skipped by the user.

1OK, AdSense links the Advertiser with the content, but how does AdSense find my content on YouTube and know to monetize it in the first place?

YouTube does that for you. To create a platform where videos and music could be uploaded and shared freely without people constantly suing each other over copyright violations, YouTube developed a pretty darn sophisticated process (called Content ID) for scanning each and every video it serves. As I touched on above, this scanning looks for visuals and audio that match not only other user-generated videos on YouTube, but also all sorts of copyrighted audio and visual content, regardless of whether that content is being posted by its owner or not.

This happens through the uploading and fingerprinting of “assets” and reference files to YouTube’s Content Management System (or CMS) for Content ID scanning and monetization. It can take up to two weeks for a newly uploaded video to be scanned against every asset in YouTube, but once a video is identified as containing something that belongs to someone else, YouTube with act according to policies set by that content owner.

So, the content owner will likely want a video that contains their original material claimed on their behalf and monetized. This means that the proper copyright owner of that content being used will signal that ads should be placed on that video (if it’s not already monetizing) and collect up to 55% of all revenue earned.

Content owners can also set all sorts of custom policies that take into account particular assets, length of match, % of match to the original reference file, and desired action (monetize, track, block, or do nothing at all). Of course, it’s not a perfect system and it can cast a very wide net at times, so there is always the option to dispute any claim on your content that you feel is incorrect.  This dispute process will force an actual human to review your content and determine if the claimant has any rights to what is in that specific video. But we’ll go more in depth on that process another time.

What is important for me to know if I want to make all the moneys?

The most important things for an artist or channel owner to do in order to monetize their content to the fullest are:

  1. make sure that you fully own all of the content you are attempting to monetize, and optimize all information and reference files associated with that content so that it is clear and complete. If you don’t own the content, you can’t monetize it, and the conversation ends there.
  2. Provide complete and accurate metadata. The more complete the metadata related to a song, composition, or video on YouTube, the easier it will be for your content to be identified and claimed and for YouTube to verify your ownership against any fraudulent actors. The accuracy of this info includes making sure that if you are claiming to own the composition, you actually did write the song and can legally claim the publishing (for cover songs or works in the public domain, you CANNOT claim the composition). The amount of content floating around out there is staggering, and accurate information can be the difference between impactful earnings or none at all. So, stay vigilant and do the work to keep your assets up-to-date and accurate.

Sound like a lot of work? It doesn’t have to be if you find a reputable company to optimize your music and videos on YouTube for you. CD Baby can do both via our YouTube Monetization program and Illustrated Sound, our multi-channel YouTube network. Apply to join today!

[This article was written by Nicholas Salomone, CD Baby’s Senior Content ID Analyst.]

Nicholas Salamone: A lifelong musician, tinkerer, and hopelessly optimistic entrepreneur. Currently, Nicholas spends his days contemplating the sanctity of intellectual property and digital rights as Senior Content ID Analyst for CD Baby.