Piracy is often cited as the main detractor for album sales around the world, but a new study from the University of Colorado and Fairfield University has found evidence to suggest that even legitimate Youtube videos could cause a drop in album sales.
The study is called Online Music, Sales Displacement, and Internet Search: Evidence from YouTube, and it looks at specific instances of videos being officially on Youtube and not and how that affected commercial album sales. While the video sharing site is often seen as a great promotional tool, it actually found that in cases like Warner’s blackout of the site, where it removed all of its big star and their videos, it actually sold more albums.
However as TorrentFreak points out, this isn’t necessarily an indication of lost revenue, as while album sales might be reduced by having these videos on Youtube, the stars featured in them were huge anyway, so the promotional angle isn’t as effective, as we saw with movie piracy. Likewise, it should be remembered that these videos are always covered in adverts, for not only other musical products, but in pre-roll videos that often can’t be skipped. That generates a lot of revenue for labels in its own right.
KitGuru Says: Since the interpretation of this study seems open to debate, I’ll throw my own two cents in. It could be to do with Google placement. Removing a video from Youtube is likely to mean that purchase links rise up the ranks in the search results page and are therefore more prominent. Likewise places like Amazon which offer previews for songs could draw people in with an absence of full song videos. However, it doesn’t necessarily make Youtube a bad guy, or even a lesser revenue source, since there’s so much speculation here, it’s difficult to nail anything down.