How, why, and when you can earn money from your music and videos on YouTube

If you’re distributing your music through CD Baby, we can help you earn money from Youtube in several different ways.

For an artist who hasn’t spent a lot of time learning about YouTube, though, the details can be a bit confusing. In this article I’d like to clarify (and simplify) the distinctions.

But first…

Why would I put my music on YouTube if people can steal it from there or hear it for free?

Well first, regarding piracy on YouTube — (and how can I put this delicately?) — get over it!

No one is stealing your music from YouTube, or not nearly as much as you might fear. Why would they? Who wants to actually keep files on their hard drive anymore when they can access the same content on YouTube almost instantly, anywhere they go, via the wonders of data moving invisibly through air?

Second: if you have concerns about subscription or ad-supported streaming, you definitely don’t HAVE to be on YouTube. CD Baby wants to enable you to do whatever it is YOU want to do with your music career. That could mean only selling vinyl albums to fans who attend your private house concerts. For others, that could mean making tracks available on every digital platform. There’s no right strategy. You should follow the approach that works best for you and your fans.

But having said that, it’s worth repeating the common argument: unless you’re Taylor Swift or Adele or Radiohead, you should be cautious about putting up barriers between you and your potential fans. Adele can window her newest album, or keep it off of streaming platforms altogether, and she’s guaranteed to still get sales… because she’s ADELE; her fans will follow her wherever she leads (though notice that her videos are still on YouTube).

Again, unless you’re sure your fans will jump through a few hoops to get your music, I’d give it some serious thought before you decide to hold your music back from the biggest listening engine in the world.

Can you really make money from YouTube?

The short answer: yes.

The longer answer: It’s like most things in the music industry. You’re not guaranteed success, and it’s always the case that a few people are earning more, and most people are earning less — but YES: there’s real money to be made, and YouTube ad money can be an important part of your increasingly diversified music revenue streams (ticket sales, CD and vinyl, merch, downloads, streaming, sync licensing, publishing royalties, SoundExchange royalties, etc.)

We’ve paid out more than $5 million in YouTube money to independent musicians so far, and that figure is growing fast. Some CD Baby artists are earning tens of thousands every quarter from YouTube alone.

And since CD Baby’s YouTube Monetization and Sync Licensing Programs are included with CD Baby distribution, why not set yourself up to collect what’s yours and be ready for when a song or album catches on?

So, let’s talk about these various avenues for driving revenue from YouTube activity

(I just used lots of V’s in that sentence, didn’t I?)

The three revenue opportunities I’ll be talking about in-depth are: 1) micro-sync licensing, 2) Content ID — including U.G.C. (user-generated content), and 3) subscription streaming and ad revenue from YouTube Music.

1. Micro-sync licensing

As the writer and publisher of your own music, you have the right to license your songs for “synchronization,” meaning your music gets synched to moving images (film, TV, commercials, games, etc.). Artists can sometimes earn high dollars from a traditional sync placement, and CD Baby has recently placed some of our artists’ songs in film and TV productions for as much as $44,000.

But with the explosion of online video over the last ten years, there’s a whole new world of sync opportunities: micro-sync licensing.

Micro-sync licensing is where video content creators (many of them non-professionals) license your music for a small fee so they can add it to their own home movies, wedding videos, and crazy cat clips. Then they can upload their video to YouTube, Vimeo, etc. without worrying about any copyright issues concerning the music.

When your song is licensed for micro-sync usage, you earn the small upfront fee for that license, AND you earn YouTube ad revenue associated with those videos through Content ID in perpetuity. (More on this second revenue source later).

If you’ve signed up for CD Baby’s Sync Licensing Program, your music will be made available to video content creators for micro-sync licensing, as well as traditional sync licensing opportunities.

[Check out our interview with CD Baby artist Josh Collum to see how he quickly grew his micro-sync revenues from a few hundred dollars a year to tens of thousands every quarter.]

2. Collecting ad revenue through Content ID

As I outlined above, you generate upfront income through micro-sync whenever a content creator legally licenses your music for use in their video.

But let’s be honest: most people on YouTube are not paying to legally license the music they use in their videos. That’s where Content ID comes in!

Through CD Baby’s YouTube Monetization Program, we’ll make sure YouTube takes an audio fingerprint of your songs using their Content ID system, and properly identifies every instance of your music across all of YouTube — not just official music videos you’ve uploaded to your own channel, but also videos uploaded by other people (known as user-generated content, or “UGC.”)

When they find such instances (in fact, when they find ANY instance of your music on their free platform) YouTube will serve up advertisements on those videos. Any time advertising revenue is generated from an ad placed on a video containing your music, you earn a share.

Why is CD Baby claiming rights to my video?

In short: we’re not.

If you see a “matched third party content” notice on a video you’ve uploaded to your own channel, that means YouTube’s Content ID system is working correctly. They’ve identified that your music is used in the video, and because CD Baby is helping you monetize your music across YouTube, the notice identifies us as the party who administers those rights for you.

You still retain 100% ownership of your music. This video will show you what to do if you see such a notice in your channel:

Again, if advertising revenue is generated — by a viewer clicking an ad or watching some minimum duration of a video ad — you, as the rights holder to the music, are paid a share of that ad revenue. You’ll see the payment in the accounting section of your CD Baby members dashboard.

[If you want to know more about how and when ads are selected for display on your videos, check out our article “How monetization works on YouTube.”]

Granted, payment from a single ad click or ad view won’t be much to shout about, and you won’t earn nearly as much from a single micro-sync placement as you would if your song got used in a Coke commercial; but in the modern music industry, what your fans do (and want to do) with your music has real value. Cumulatively, ad revenue through Content ID and licensing fees for micro-sync placements can add up, especially when you consider that these earnings are possible in perpetuity.

Rather than the one big moment, it’s about volume over time.

How can you generate more advertising revenue on YouTube? Try a few of these techniques to encourage your fans to create video content using your music:

* Create and upload videos for ALL your songs (even if they’re just simple album art videos).

* Sign up your entire back catalog for CD Baby’s Sync Licensing and YouTube Monetization Program, because you never know which of your songs might be perfect for some content producer’s needs. Even your oldest songs can keep working for you long-term.

3. YouTube Music

Here’s where things can get a little more complicated. YouTube recently launched its YouTube Red subscription service, which lets subscribers watch videos and listen to music (including full albums in high quality audio) ad-free  — even when offline — for $9.99/month.The music portion of this subscription service is contained within an app called YouTube Music (formerly known as YouTube Music Key).

As a CD Baby artist, if you’re distributing your music to streaming services such as Apple Music and Spotify, your albums and singles will be delivered to YouTube Music automatically as part of your distribution package.

Note: this distribution to YouTube is a SEPARATE service from our YouTube Monetization Program, even though both are included in the price of any CD Baby Pro or Standard package.

(Don’t want your music streaming on YouTube? No worries. Just change your distribution preferences within your members account.)

So, if your distribution level is set to include streaming services, we will deliver to YouTube high quality album art videos, or what YouTube is calling “Art Tracks,” which play audio while displaying an image of your album cover.

These Art Track videos are available NOT ONLY to YouTube Red subscribers — for which you’ll be paid a streaming fee based on YouTube Red’s monthly subscription revenue (similar to how Spotify and Apple Music structure per-stream payouts) — but also as ad-supported content accessible to EVERYONE for free on YouTube.com. That’s why it’s important to make sure you’re set up to collect ad revenue through Content ID as well, because the same exact Art Track video could be earning you money in two different ways:

* Revenue for a subscriber’s streaming activity on YouTube Music will be paid to you by CD Baby similarly to a stream on Spotify or Apple Music, and you’ll be able to view the details in the accounting section of your member account.

* If the video is viewed by non-subscribers, it might be generating ad revenue. Your share of that revenue would be paid to you through CD Baby’s YouTube Monetization Program.

What if I don’t want my music on YouTube?

That is fine. You can change your distribution settings within your CD Baby member account at any time. We’ll have YouTube remove those Art Track videos.

4. Elbow grease

There are, of course, plenty of other ways to use YouTube to earn money.  These include:

* Harnessing the power of your fan community through a service such as Patreon.

* Using YouTube Cards, calls-to-action, and video descriptions to drive external sales or crowdfunding.

* And the most obvious of them all — crossing your fingers and hoping that exposure/activity/promotion means that if people enjoy your music and videos on YouTube, they’ll be more likely to buy an album, sign up for your mailing list, or attend one of your concerts down the line.

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Hopefully this helps you better understand the process of monetizing your music on YouTube. The good news is, even if the details are still foggy, you really don’t have to worry about it when you sign up with CD Baby. We’ll monetize your music for you, make sure that Content ID is working correctly, and pay you what you’re owed (both ad revenue and subscription streaming revenue.)

Get started monetizing your music on YouTube today!