Warner Music Group (WMG) and Google’s (GOOG) video-sharing site YouTube haven’t been able to agree on a licensing agreement since December.
We figure it costs WMG more than $23,000 per day and at least $8.6 million per year.
Here’s how we got there:
- TubeMogul tells us that during the 30 days leading up to their removal from YouTube, WMG music videos averaged 2.97 million views per day.
- A source tells us that as a part of its original licensing agreement with WMG, Google agreed to pay $0.008 each time a user played any WMG music video.
- Multiply $0.008 against 2.97 million and you get $23,760 per day and $8.6 mm per year.
The number is actually higher than that. Our source says Google also pays $0.004 each time a user watches a video featuring any WMG music in the soundtrack. TubeMogul hasn’t tracked how many times videos like that get played each day.
Ordinarily, $8.6 million wouldn’t seem like much considering Google and WMG’s revenues. But these aren’t ordinary times. Google’s laid off 300 people. Without careful cost-cutting like this, that number could be higher.
Update: Industry execs tell Peter Kafka Google only paid about $.005 per stream. $.008 is what the labels wanted, but didn’t get, he says.
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