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12/01/2015
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A guide to YouTube monetisation with Rumblefish's Ben Kihnel

Rumblefish's Director of Business Development Ben Kihnel takes us through the fundamentals of monetizing your music on YouTube.

Monetizing on YouTube can be an incredibly confusing area for artists and rights holders. We speak to Ben Kihnel, Rumblefish’s Director of Business Development, to gain more insight and clarity in this area.

Screen_Shot_2015-11-05_at_19.04.20Hi Ben, can you tell us a little bit about Rumblefish?

You can think of Rumblefish as almost a distributor for sync licenses, so anywhere creators are making their creative works, we provide the music inventory and the license inventory in those environments to give them access to unique music they can use in their works. And that creates a powerful multiplier on networks such as YouTube in terms of the videos that can be monetized.

Micro-licensing seems to be an increasingly important revenue stream for the industry. How has Rumblefish been involved?

Yeah I think really it’s just a natural evolution of technology. More people are creating works and sharing them in social video, in social media in general, and whenever there’s a moving picture, there’s a synchronization component that applies to music. So rather than pick up the phone or send faxes or clearing various rights with different parties, we saw a lot of utility and value in pre-clearing tracks, and making them available for license via programmatic means. So folks can go to a web video editor or a slide show editor on a desktop or in a mobile app environment, and upload their video and choose a soundtrack right there from a very intuitive playlist.

It’s been a really fun thing to watch, it’s grown significantly over the last couple of years. We were in very early, so we had some influence in setting standards in terms of pricing and how the whole ecosystem works. So we’re really bullish about the future of micro-licensing, and not only micro-licensing but programmatic licensing in general. Simplifying licenses, providing the rights information and inventory under a single roof, and making it easier for people to engage with music.

What’s the difference between monetizing your own channel and working with an administrator like Rumblefish?

The real distinction is that anyone can become part of the YouTube partner program, which means that any of us out there with a YouTube channel can upload assets to that channel and as long as we own the copyrights and don’t violate the terms of use, we can monetize those assets ourselves. If it’s your goal to run a YouTube channel and monetize it independently, there’s no distinct reason why you should be working with an administrative partner. If you don’t want to bother with that, an administrator can also monetize your channel on your behalf and also in many cases, MCNs (multi-channel networks) or parties like Rumblefish can help you with the optimization of your channel.

The difference in working with an administrator is that parties like Rumblefish can enable your assets for monetization when they appear organically on different channels within the YouTube ecosystem. So if I make a video, and I pull your song out of my iTunes library and put it into YouTube, your administrative partner will claim and monetize that on your behalf. So if your content is of the nature that it’s really well distributed and it’s showing up organically in environments like YouTube, you definitely want to work with a content ID provider such as Rumblefish, because we can make sure that all of that stuff is claimed properly, and that the royalties that are derived from those exploitations are collected and remitted to you.

YouTube uses content ID, that’s the proprietary mechanism by which they identify content. So an admin like Rumblefish delivers the reference material to YouTube – that is the master recording and the other constituent assets that embed therein. So the composition information, all of the metadata in the master file. When YouTube scans via an algorithm, and detects the usage of a particular audio asset, it checks in its database to see who owns this asset or who admins this asset, and if it is, in fact, administered by Rumblefish, a default claim is made. So if Rumblefish administers this asset, we can choose which policy to apply. And that may be block, monetize or track, in any given set of territories, and that’s how the system claims and attributes ownership to a specific party.

What’s the difference between an administration company and an MCN?

The short answer is, you can think of an MCN like a record label for your video assets. So what they do is aggregate content, and they help you optimize the front end of your channel, and in some cases they have brand sponsorship opportunities. They will also cross promote you with other like content and they can help you out in a number of ways in terms of making your actual channel optimal, and making sure that your assets are set to monetize correctly. What they don’t do is the part we were talking about earlier – they only operate within the context of their ecosystem. So they will help you with your own channel, but if I or somebody else out in the wild uploads your track or your composition into a video they will not claim that.

Does Rumblefish often work with artists and labels who don’t have a presence on YouTube?

Yeah I think that speaks to our micro-licensing program. Again, if your content is widespread throughout YouTube, and you have an admin partner and they’re out there collecting all that organic revenue derived from ad monetization and viewership, that’s kind of Mount Everest right – you’re at the top.

If you’re just getting started, and you have your own channel and you’re garnering some subscribership and viewership, and you also want to get your assets into more videos, something like micro-licensing can really help to get your content in front of more creators. You can either license on the front end, and allow them to monetize independently within YouTube, or some folks don’t really care they’re just creating for social currency. They’re making a video of their vacation or their cousin’s graduation, and they’ll put those videos up on YouTube with no intention of monetizing, in which case, you just get that multiplier of more people using your content and you being able to monetize it on the backend, as well as the front end from licensing.

What advice would you have for people getting started on their channel and trying to drive traffic?

There are lots of resources to educate yourself on how to build and manage the best YouTube channel. It’s relatively intuitive – think about how other programs are programmed and scheduled, and aimed at certain audiences. If there’s continuity to your content, you definitely want to put annotations on given videos that lead to the next video so you keep people engaged. YouTube really values things like watch time, so if you can keep a viewer watching video after video, that really influences your search engine optimization within the platform, and helps expose your content to more viewers. The look and feel of your channel is also really important. Generally having some genre or thematic continuity helps to distinguish what a channel’s all about, what it’s trying to convey. And things as simple as a nice description on your channel, so those first time visitors really have an idea of who you are and what your channel is about.

If you’re purely doing it as a channel to expose your music, that’s great. But if you can also add ancillary content that shows your personality, other things that you’re into, maybe you do really awesome things in your community, maybe you show people how you go through the songwriting process, perhaps interviews, other compelling content can really help bring people into your channel so they subscribe. And you can program it in such a way that it shoots out an email to your subscribership that says, “Hey, we’re going to do this series every week”. Or “I’ve got a new video coming out, check it out.”

Again, an MCN can sometimes help with this, but if you understand those concepts and you engage with an audience, you don’t necessarily need them. It’s kind of like I’m doing really well as an artist and I’m touring and selling merchandise, do I need a label? Well, that’s variable. In some cases you really don’t need that push because you’re doing it yourself.

What types of ads can you expect to be displayed? Are there any settings you can enable that would be more beneficial for music based content?

There are several different ad types that display over video content in YouTube. Within your channel you have some controls where you can either enable or disable certain ad types, based on your preference. AdSense is generally the means by which those ads populate, but essentially it’s pretty random. It’s topical generally, so if your content is about sports, it’s very likely that you would see Reebok or Adidas or Nike types of ads. In terms of the types of ads that populate, display ads are the most popular. There is also the pre-roll – these commercials that happen before the content starts. Those are obviously bigger and more prominently placed ads that generate higher cost per thousand views, and ultimately more royalties.

The way to get those things to happen is a) to have popular content that’s drawing a lot of viewership, and b) one of the tricks that I’ve seen that triggers the better ads, is to be able to claim all the copyright embedded in a given work. So the composition, the sound recording, and then also the video asset itself. If you have that triple claim to the content, it’s more likely that you’ll get a better performing ad.

Can you recommend some resources for people to check out?

CD Baby are starting an MCN called Illustrated Sound that’s picking up really quickly, and they’re very well informed on the front end points of optimization of YouTube, so you can check with your reps there. Maker Studios is obviously the big kid on the block – they’ve got a tremendous amount of resources available to people who are part of that MCN. And there’s a million others out there – it just kind of depends on the nature of your content. If you’re a gamer, Machinima is going to be able to help you optimize content. But YouTube itself also has a lot of resources that you can get access to that will help you optimize your channel. I would say just keep an open mind, get out there and do some research, and don’t believe everything you read. We’re all in the business of marketing ourselves so you really have to do some diligence and talk to other creators and see if it’s the right arrangement for you.

Is it important to choose the right MCN for your content?

Absolutely. If I have a channel that has 20 subscribers and I get about 10 views a day, it’s not likely that my representatives at a given MCN are going to find my content really compelling. You have to graduate to a level within that ecosystem that really makes sense for them to get behind you. That’s not to say they won’t let you in the door and start taking a portion of your revenue just for joining. So again, be careful.

What are the typical minimum views an MCN would expect before they’ll work with you?

There are some that have very little barrier to entry and their goal is to take a chance on anybody and hope that something goes viral. A good example of that would be The Freedom Network. Illustrated Sound, CD Baby’s MCN, has a threshold of 500 subscribers. But in general they all have their own entry requirements.

How important is tagging and metadata?

Metadata is really important – there are really three forms of metadata that you should concern yourself with:

Structural metadata – Generally, it will be the format and the means by which you deliver your content to be ingested and delivered into another environment. That just means being nimble enough and having rich enough data to adhere to a spec.
Descriptive metadata – This is very important, especially in terms of licensing. You want to have more than breadcrumbs to lead someone looking for your music to you. That can be objective (e.g. bpm) and subjective metadata (e.g. ‘car chase’, ‘crescendo’, ‘love song’, ‘triumphant’). If it’s a go-pro mountain biking video, something like ‘extreme sports’ or ‘mountain biking’ might be keywords to help people find your music.
Administrative metadata - One of the most important things for rights holders to be aware of is that your administrative metadata. As we get into this matrix of streaming services and licenses and different territories, we want to make sure that our ISRCs and our ISWCs are consistent across the board. And other unique relevant identifiers are there so that all of the parties you’ve employed to collect for you, whether that be your PRO or Harry Fox Agency, or your administrative partner or digital distributor, all of them have consistent data so you can make sure those monies get back to you in a timely manner.
One of the main tips is metadata should be honest – if all of us say we sound like Radiohead meets The Beatles, which none of us do, then that obviously skews the results. So really being self aware of your content and tagging it in a way that’s actually meaningful will help quite a bit. Working with a partner that has been in this system for a long time and recognizes the value of a deep taxonomy of metadata that is actually relevant and applicable to the ecosystem is a good place to start.

Overall metadata is everything: The structural stuff helps expedite ingestion and delivery, the descriptive stuff helps people find you, and the administrative stuff helps those royalties that are created find you as well! All three points should be on top of your mind.

Can I monetize a cover song on YouTube?

If I go and do my banjo cover version of “Highway to Hell” and I put that cover on YouTube, I can monetize that master recording, I just have to make sure I’m taking care of my mechanicals. Harry Fox has a very easy program by which artists can go and pay for mechanicals ahead of time for digital exploitation

There will be a third party, generally the publisher, that comes in and claims the rights to the composition, and there are different rates for monetizing compositions vs master recordings. But you can participate in some of the revenue as someone doing a cover.

There are those cases where your arrangement is so different that it's actually a derivative work and you’ve got a license whereby you might be able to publish your rendition but that’s rare.

If your rendition of a composition is so close that it actually fools the robot, it might be claimed by the actual label. If it sounds almost identical to the original recording, the content ID system may think it’s the actual original. So that could require some untangling. But generally it’s pretty accurate and can distinguish between one version and another.

In terms of micro-licensing, who are the key potential clients to be aware of?

In the simplest sense it’s anybody who’s creating video, particularly for new media environments. So in addition to YouTube creators, which obviously run the gamut from how-to videos to short form comedy writers to auteurs to brands, to gamers who want to include your song in their let’s play or how to videos. Those are some of the most popular categories on YouTube.

But also environments like Shutterstock who we provide music to. Some of them are sharing to YouTube, some of them are using it for isolated internal presentations, some of those folks are sharing on Vimeo or Dailymotion or any other environments that have really yet to monetize, but they’re still licensing up front so they’re doing the right thing.

Can you give us some insight into the future of licensing and how micro-licensing might play a part?

I think we can expect to see other platforms open up. We talk a lot about YouTube, but Facebook is on the horizon – there’s a lot of video being shared in that environment as well. Dailymotion is another one that’s sure to open up and allow people to share music copyrights embedded in video there. And there’s a mechanism for content ID that works in those environments as well – it’s called Audible Magic and they are the content identification party.

We register our music with them as well, so we are primed for the time when those avenues open up. Also apps may be ephemeral, but we never know who’s going to be the next Flipagram, so those are also opportunities that are emerging rapidly to license in high velocity, high volume environments, which may come with lower upfront fees, but very limited use cases, and, of course, the aggregate value of having a well distributed, frequently licensed piece of content is a nice complement to your economic portfolio.

How has micro-licensing changed the licensing environment?

The old world of licensing came with a lot of opportunity cost. That’s to say if I’m a publisher, I don’t want to pick up the phone and spend half an hour communicating back and forth about a $50 license. But within the new media environment, if you can get 100 of those $50 licenses a week, then that’s a good thing. If people can’t find your music and they can’t license it simply, they’re probably going to move on to the next best thing.

The old world is sort of like eating like a lion – you eat every once in a while and it feels great, but then you don’t know when your next meal is coming. With live distribution, micro-licensing, YouTube monetization, all these things it’s kind of like eating like a blue whale – you just open your mouth wide and let the penny waterfall trickle in.

Have you seen large revenues come in from independent copyright owners?

Absolutely. I always try to remind people that this isn’t a replacement for everything else you’re doing. You still want to sell downloads, you still want to get paid by streaming services, you still want to tour and sell merch and everything else. But this is just another way to diversify the portfolio, get some extra money. But we’ve seen some wild successes as well. For instance, we had an artist that is regionally known but not to any great extent. The music just happens to resonate really really well with a specific audience and we have programmed it intuitively in an environment where 100,000 videos are being created and pushed to YouTube every month. Because he’s at the forefront of that offering, he’s seeing checks that are up to $14,000 a quarter and they’re all from these lower dollar but higher velocity licensing events within that slideshow editor – Animoto, and also the backend ad monetization that’s happening on YouTube.

As we discussed before, there are a lot of folks that license with the intention of licensing independently. If they’re paying you $25 for a web license, generally speaking you’re beating the average backend monetization of the ad revenue by miles. The terminal value of a given piece of content on YouTube is going to be a couple of dollars over its lifetime. If you can get that licensing revenue upfront, you’re doing a much better job because people are betting on the dream – no one wants to believe that their video creation isn’t going to make any money. So they will license it. But some of them are just doing it really to share, so you’re getting that licensing revenue upfront and then you’re participating downstream in the monetization.

Do you see big problems come through with people claiming rights they don’t have?

It’s caustic to the infringers’ YouTube channel. There are some unscrupulous people out there that will throw up a channel, steal somebody else’s video or music copyright, hope for the best, get those initial views and then once they get caught they kind of disappear into the ether and start another channel. That’s not a huge concern for us here because in every case we’re recognising our content in a YouTube environment and placing a claim on it.

Now if there’s a third party also claiming it and they’re an administer as well, there is a means by which to contact them through the YouTube environment. But if you know for a fact that somebody is using your content without authorization and they haven’t purchased the license and you can’t facilitate contact to work it out, you can send a DMCA takedown notice. I would ask people to please rely on that option as sparingly as possible, because generally it’s a misunderstanding.

There are some opportunists out there that are deliberately violating but a lot of people are just ignorant to the nuances of copyright. And an administrative party can generally mitigate that where it’s not a big concern.

Thank you so much for your time Ben!

Thank you!