Sometime this month, an almost five-year-old YouTube record will come crashing down. YouTuber Felix Kjellberg, popularly known as PewDiePie, will no longer be the king of YouTube. His vast legions of subscribers, no longer the video streaming platform’s largest subscriber base. The usurper to the throne is an unlikely one—Indian music label T-Series.
T-Series’ impending ascent to the top has sparked something of a mock feud, albeit mostly on Kjellberg’s part. In multiple video uploads, he’s taken potshots at T-Series, its content, and even the legitimacy of its subscribers. He even dropped a diss track. The battle for top spot has gotten so fierce that one YouTuber even bought out billboards across an entire US town telling people to subscribe to PewDiePie. There’s also a live stream of T-Series and PewDiePie’s subscriber counts to track the event in real time.
Being The Largest In The Market
The emergence of T-Series as YouTube’s single largest player is something that could scarcely have been predicted at the start of 2018. Back then, T-Series had a subscriber count of around 30 million; a far cry from the 68 million+ it boasts today. But, in hindsight, its rise seems like a no-brainer given India’s data revolution over the past few years.
The entry of Mukesh Ambani-led telecom company Reliance Jio in September 2016 sparked off a tariff war in the sector, sending data prices plummeting. In what has since been called the ‘Jio Effect’, the average price of mobile data in India has dropped from Rs 152 ($2) to Rs 10 ($0.14) since Jio’s entry, according to a report by the Institute of Competitiveness. On the back of this, says the report, Indian mobile data usage surged by up to five-fold, making India the highest user of mobile data in the world.
Unsurprisingly, as evidenced by T-Series’ rapid growth on YouTube, a large chunk of this data is being used on video streaming services. In an emailed response to The Ken, Gautam Anand, head of the Asia Pacific region for YouTube, says as much. According to him, there are 245 million unique users from India and daily active viewers are growing at 100% year-on-year (YoY).
With more users coming online, India has finally arrived on YouTube, with T-Series being merely the tip of the spear. Other music labels and intellectual property aggregators such as SaReGaMa, Times Music, and Shemaroo have also seen their view and subscriber counts grow as Indians look to sate their appetite for more Bollywood and regional content.
All of this makes for excellent optics, but there’s a catch. Even as YouTube video consumption explodes, these companies are not making nearly enough advertising money from the platform.
Ad revenue from YouTube is entirely dependent on Google’s AdSense, the company’s monetisation programme for various forms of content. And with AdSense, the cost per thousand impressions (CPMs)—a unit used for digital advertising—in India is abysmal. According to T-Series president Neeraj Kalyan, even for T-Series, soon to be the largest channel on YouTube, their CPMs are less than a dollar. As a result, reveals Kalyan, a million views amounts to little more than Rs 25,000 ($346).
To make matters worse, this revenue doesn’t go solely to the channels. Instead, YouTube and music labels also have to work with collecting agencies such as the Indian Performing Rights Society (IPRS) to distribute royalties from music streaming to composers, music directors, song authors and lyricists.
Location, Location, Location
To answer that question, let’s rewind to the PewDiePie and T-Series situation and compare the two. According to analytics website Social Blade, T-Series had close to 2.4 billion views this past month, while the PewDiePie channel clocked a little under 224 million views. In theory, T-Series should earn a little more than 10X the ad revenue of PewDiePie. However, in reality, this gap is likely to be much smaller, because CPMs—which determine ad revenue earnings—are dependent on where the views come from.
There are several estimates on the value of CPMs around the globe. However, they all concur on one thing—CPMs in India are markedly lower than in most more developed countries.
And on top of that, there’s a 45:55 split of the ad revenue. Sort of a platform fee. YouTube gets to keep 45% of the ad revenue, with the rest going to content creators. Given all of this, is YouTube really moving the digital revenue needle for Indian music labels?