Originally Posted by Nonlinear
This is an "OT" post but I thought you folks close to the big names might know the answer:
Why do so many big name acts post their new releases on YouTube – where anyone can “rip” the audio for free?
Many of these videos sound pretty good (i.e., they’re consumer quality mp3). So why would someone BUY it on iTunes?
It's not just a question of promotion.
It hasn't been mentioned in this thread that you can become a YouTube partner in the YouTube Partner Program if you post regularly and have views in the millions.
In this case the record label gets a share of the ad revenues. It's now an income stream similar to a combination of public performance monies and neighbouring rights. If an independent artist or small label is succesful in obtaining a partnership deal with YouTube it's more lucrative than Spotify.
Most labels have people employed to report copyright infringing videos to YouTube in order to maximize streams of the original video.
However, both YouTube and Spotify are swindling the artists and songwriters. YouTube is simply refusing to pay unless you've obtained a partnership deal, which is why YouTube and local copyright collectors have been in "negotiations" for years. It's interesting that 80% of YouTube's revenue comes from using other people's copyrighted material.
Spotify swindles in a more sofisticated manner in cohoots with the major labels (Universal, Sony, EMI, Warner) who all received equity stakes in the company. This enables Spotify to buy music at very low prices from the major labels which in return pay very low royalties to the songwriters, artists and producers. At the same time they're building the marketshare and worth of Spotify itself, which is not subject to royalty payouts at a later date. A classic swings and roundabouts scam which benefit only the major labels and the other owners of Spotify.