YouTube significantly hurts music sales, says new report

11 Apr 2014

The use of YouTube as people’s go-to source to listen to music is having a detrimental effect on the music industry to the tune of US$40m a year, a new report suggests.

The report, Online Music, Sales Displacement, and Internet Search: Evidence from YouTube has been published by the Center for the Analysis of Property Rights and Innovation.

The research has been based on the removal of all Warner Music content from the video-sharing website four years ago and its subsequent re-instatement and the time in between.

The research findings reveal YouTube’s decision to remove the content led to an increase in individuals using torrents to download music when the free and readily available option on YouTube was removed.

In figures, the removal of the content in 2009 led to a loss of album sales to the tune of 10,000 copies a week for some of the top albums.

Under the assumption that Warner would have 40 albums in the Billboard 200 charts at any given time over the space of a year, the earnings loss would equate to US$40m.

While Warner content is now back up on YouTube, the company removed its content from the site in 2009 after negotiations on a contract with YouTube broke down, for reasons which were never disclosed. Researchers suggest the estimated drop in sales was a contributing factor for re-instating the content.

Online music purchase image via Shutterstock

Colm Gorey was a senior journalist with Silicon Republic