A brief look into the numbers behind VEVO.
Vevo’s advertising is fairly stable with average CPM (cost per thousand) rates of $25-$35, which is in line with forecasts by Credit Suisse for 2013 that expect premium online ads to cost $32.60. It generated nearly $300 million in revenue in 2012, according to a Wall Street Journal report.
VEVO, which is owned by the major labels, announced at the Business Inside: Ignition Conference last November that the company would pay $100 million dollars in royalty revenues in 2012. The company also reports from 3.2-3.75 billion video views a month (40-45 billion views a year). Rockonomic did some simple arithmetic and divided the revenue by the views. Ta-da! Based on grade school math, artists stand to earn anywhere from $0.00222 to $0.0025 per stream.
We decided to apply the formula to some of VEVO’s videos to try to get a sense of just how much stars from Carly Rae Jepsen to UGK are raking in … before the labels and other artists that worked on the songs take their cuts.
[Ed. All plays are through Feb. 28, 2013. All estimated royalties are rounded up to the nearest cent.]
Video: “Push Thru”
Artist: Talib Kweli ft. Curren$y and Kendrick Lamar
Plays to date: 209,035
Estimated royalties to date: $464.06 – $522.59
Video: “Int’l Players Anthem (I Choose You)”
Artist: UGK ft. Outkast
Plays to date: 365,094
Estimated royalties to date: $810.51 – $912.74
Artist: Taylor Swift
Plays to date: 132,117,105
Estimated royalties to date: $293,299.97 – $330,292.76
Video: “Call Me Maybe”
Artist: Carly Rae Jepsen
Plays to date: 415,106,066
Estimated royalties to date: $921,535.47 – $1,037,765.17
Artist: Justin Bieber
Plays to date: 835,174,296
Estimated royalties to date: $1,854,086.94 – $2,087,935.74
How online revenue collection works?
Many of those payments don’t go directly to artists once they’re distributed by SoundExchange, the organisation that collects digital performance royalties on behalf of sound recording owners and performing artists. So an artist like Drake, whom Pandora claimed would receive performance royalties of nearly $3 million a year, would only actually receive $1,278,450 as the performing artist, since SoundExchange distributes 45% of net royalties to the performing artist of the sound recording.
The label would get $1,562,550, as the owner of the recordings, and other musicians would receive $142,050, or 5%.