How do Record Labels make Money from YouTube and other Mediums?

How do Record Labels make Money from YouTube and other Mediums?

How do Record Labels make Money from YouTube and other Mediums?

The network can reach a wider audience between 18 and 34 than every social media site, allowing independent artists to profit handsomely from their efforts. Stardom is fantastic and all, but what about the money? Having tens of millions of YouTube views must imply wealth, right?

After all, don’t you get paid whenever someone watches your video? Not quite, as it turns out. You can make money as a musician on YouTube, and many people do. However, making genuine money requires a large number of views. The truth is that YouTube’s rewards are extremely complicated and, in many cases, extremely little.

So, if you’re going to attempt and make money with your music on YouTube, these are some of the key questions you could have. Best of luck, and may the viral gods be on your side.

How much will each view cost me?

The amount of money you’ll make from a video is determined by various factors. However, some experts told us that the money is worth depending on the average per million views. Million is correct.

At the upper end, a click costs around $0.002, or one-fifth of a cent. That’s around half of what you’ll earn from Spotify each stream and less than a third of what you’ll get from Apple Music.

Participate in the YouTube Partner Program.

You can apply for the YouTube Partner Program if you’ve reached 1,000 subscribers and 4,000 view hours in a year.

Joining the YouTube Partner Program has various advantages; the most important is that Google handles everything for you. From ad placement to income collection and payment management, Google has you covered.

YouTube Merch Shelf allows you to sell your merchandise.

If you have a large or small fan base, selling merchandise online is a terrific way to strengthen your bond with them.

How is a YouTube Merch Shelf, exactly? “The Merch bookshelf means allowing creators to promote their official branded items on YouTube,” according to YouTube. If a station is qualified, the shelf may appear on the watch pages of their videos, although it may not appear for all films.

How to link your merch store to your YouTube channel

  • Open YouTube Studio and log in.
  • Click “Monetization” in the left menu.
  • The Merchandise tab was selected.
  • Link your official merch store with your YouTube channel and follow the on-screen instructions to enable the merch shelf for your channel and videos.

Obtain a corporate sponsorship

A partnership between you as an artist/content producer and another brand or company is brand sponsorship. Brands will usually approach you if you have a larger YouTube account and ask if you want to collaborate.

If you want to continue expanding your YouTube channel, you’ll need to find a sponsor and contact them. You will agree that you will fundamentally promote a service, product, and brand in exchange for payment.

A highly engaged audience is the most important prerequisite for gaining a brand sponsorship. It makes no difference if you only have 1000 followers if they are participating with the material you are producing.

So where does all the money come from, anyway?

Only in broad strokes can you regulate what adverts your users see as the owner of a YouTube channel. You can prevent ads from appearing from businesses, such as astrologers or booze brands. You can also block advertisements from certain websites. For example, you can opt out of having your ad space purchased by a competitor band’s label. But that’s pretty much all.

Using Spotify to Make Money

Spotify is a free music streaming service with a paid premium option that removes advertisements and allows you to listen to your saved songs offline. How can a record label make money by placing songs on Spotify when many people don’t pay for the premium version?

Streaming & Sales

Sales and streaming are the first and certainly most obvious ways for a record label to make money. The listener is the product’s consumer, and the music is the product.

People that buy and listen to their music on various streaming platforms generate cash for artists and labels. Apple Music and Spotify are the two most popular music streaming services.

In most cases, the label will take 60 percent to 70% of the revenue from each iTunes download.

Licensing and Publishing

Traditionally, record companies have made money and invested in the release cycle of the music they publish for their artists.

The label invests inside the recording and marketing like a standard record deal. If the label has a license agreement with the recording artist, it will be paid a share of the album’s profits. The goal here is to recuperate investments first, then generate a profit.

Many individuals (engineers, producers, studio owners, and so on) still need to be paid for their labor on the album. Therefore, this money stream is entirely dependent on the artist’s success. More money will come from publishing and licensing if more effort is put into merchandising, advertising, and marketing shows.


A record label makes money from royalties every time one of their records is played as the rightsholder of recorded copyright.

Use or digital replication of the recording device of the music earns recording royalties. The copyright recording’s rights holder is entitled to payments when the material is broadcast, downloaded, or purchased in a tangible format.

As a result, the record company receives royalties whenever their records are played. Independent musicians (without a record deal) will most likely control the copyrights to their recordings.

The music artists (performers) will then receive a percentage of the recording royalties from the record label.

Final Verdict

Investing in the cycle includes promoting shows. If your talent appears in events or concerts that generate revenue, the label will return a portion of that revenue to us. Having well-promoted gigs for an artist is a clear way for a label to maintain making money.

Shows often bring in additional revenue through ticket and merchandise sales (which a label may also own some portion of). This could assist recoup some of the costs associated with the “spend money to make money” part of advertising events. A label must pay for advertisements, posters, venues, and all the costs associated with a show.