YouTube just announced it paid over $8 billion to the music industry in a single year, powered by its “twin-engine” of ad and subscription revenue. But for many artists, the headline figure reveals a murkier reality. In a world run by algorithmic discovery and video-first platforms, the real question isn’t just about the total payout, but who actually gets a piece.
To unpack the finances, we spoke with Matthew A. Gilbert, MBA, a Lecturer of Marketing at Coastal Carolina University and a multi-time TEDx speaker with expertise in marketing technology and AI. With firsthand experience with music monetization through his musician sons and former father-in-law, his dual view makes him an ideal guide for navigating the new frontier.
According to Gilbert, the industry is in the middle of a fundamental change, moving from an era of broadcast television to one dominated by video-first, algorithm-driven platforms. He boils this historical succession down to a single line, noting the change reflects a timely reality. "We all remember the song 'Video Killed the Radio Star.' Well, today the new reality is that YouTube killed the MTV star. The timing is interesting because MTV just officially stopped broadcasting music," he says.
- Tortoise tactics: But focusing only on paid subscribers is a red herring, Gilbert explains. While YouTube's dedicated music service trails competitors (with Spotify attracting five times as many paying subscribers in the US), the more important metric is total user engagement. "Spotify had a head start in the race. They're the hare that got ahead of the game. But YouTube is the tortoise, slowly catching up. I could really see YouTube surpassing Spotify simply because it's so multi-platform and, at the end of the day, it's Google. That massive footprint and engine is behind it," he observes.
- Context is king: A MIDiA Research study showed that while short-form video provides exposure, it often fails to build fandom, with only 19% of 16-24 year-olds who discover an artist they love go on to listen to more of their music. For Gilbert, a key difference lies in the user experience. "I listen to Spotify mostly in the car, where I can't watch anything. I watch YouTube at home, where the video is the draw. While the music itself will always reign supreme, the method by which it is delivered to people matters. YouTube's delivery within a video context is far superior and much more preferred by consumers," he explains.
- The human algorithm: This video-first reality, Gilbert notes, requires a new marketing playbook. The cultural move toward short-form video, what he called the "TikTokification of music," means artists now need to compete in a visual medium, creating a difficult balance between artistic expression and algorithmic optimization. "While you need to lean into the algorithm and be algorithmically anchored, you can't forget that music is a personal experience. You still have to retain that human component."
The new environment gets even trickier with the explosion of AI-generated content. Gilbert points to clever examples like an AI-generated country cover of Rick Astley's "Never Gonna Give You Up," but explains this trend creates unresolved copyright issues and, in his view, lacks a key ingredient. "A lot of this AI music is surprisingly good, but it's missing that soul," he says. Paradoxically, AI's effectiveness underscores the value of the human artistry, noting that even a clever remix only works when it has a pre-existing connection to the listener. "The AI remix worked because it was based on an actual song that had an emotional anchor and nostalgic element," he outlines.
Gilbert concludes by reframing AI not as a threat, but as a practical production tool for creators. He offers a tangible example from his own work, where he uses platforms like ChatGPT and HeyGen to create a "digital twin" to produce lecture videos at a scale he could never achieve manually. It offers a potential blueprint for independent artists struggling to meet the new demand for high-volume video content. "AI gives musicians and artists incredible flexibility. For a small player in the music industry, creating video by sitting in front of a camera is almost impossible because it would take 20 takes, plus outtakes and editing. Now, they can leverage AI to create the visual component for their own music. It's a way for them to scale."