Ghastly though this is, it is clearly the best example yet of the new model; even though it sounds produced in Holland in 1995, it has broken without any radio, with only recent TV... entirely through You Tube and online sites.

Why? Because it is infernally catchy and annoying; forget the superb visual promotional hook, the actual music is commercial and mass appeal, rather like the biggest seller of 2012 so far - Gotye.

Alex Day's new single, Stupid Stupid, may fall into a similar category. Let's see.

So true JK. Youtube is becoming the most influential medium for a hit.
TV is clearly number one and radio 3rd. I rate them this way because of
the CTR per 1st showing. Will see how Alex's new single performs.

Everything you say is right, but it is not the whole story.

Gangnam Style is an example of the use of new media (YouTube) by old players (YT Entertainment / Universal Republic) generating good old fashioned hype via old & new media:

Andy Yeti-Barr has analysed the strategies behind this success story:

"Looking at YG's seeding platform, pre Gangnam, it had circa 2.5m subscribers to its various YouTube channels and had achieved in the region of 1.6 billion views of musicians’ videos across those channels. WOW! Its main artists also, as is expected, have Twitter accounts; the majority that I looked at were mainly channels to push information but with high follower numbers.

These seeding platforms were vital to its efforts. YG knew that its YouTube subscriber numbers alone would mean that it would get high volumes of views from day one. This would take the pressure off them to try and push the story onto media, as media would be dragged in to the story by the high viewing figures.

(...)

To help with this, it contained a kid who had caught the media's attention with his crazy talent during Korea's Got Talent, a famous South Korean comedian (the guy in the yellow suit) and another famous entertainer (the guy thrusting his crotch in the lift scene). These three people, alongside Psy, made for a hugely strong cast and one that would appeal back home

(...)


The video was launched on July 15 2012. It was preceded by two tweets from @allKpop, the twitter account associated with American based AllkPop.com, a celebrity and music gossip site focussed on the Korean music industry

(...)

The video debuted at number one in the Korean music charts, nice!

(...)

The next big push came via Gawker, which wrote a story on the song and video that generated 19k of Facebook Likes/Shares for the article (July 30).
This was followed by Billboard (the site that I suspect triggered the celebrity

(...)


The spike in traffic and views of the video caused YouTube Trends to write a post on Gangnam Style, making it their Video of the Month in terms of views and likes (Aug 7).

Whilst many news pieces started emerging at this time, both in terms of online and broadcast media, SkyNews in the UK was probably the next big, (in terms of influence), channel to run a feature (Aug 13).

(...)

Late on September the 3rd, a YouTube video showed Psy drinking a shot with Scooter Braun, THE Scooter Braun offa Justin Bieber manager fame, seemingly celebrating them working together started doing the rounds.
This was a huge announcement and the media, once again, went into overdrive, with seemingly every gossip and music site writing up the story."

The Gangnam Viral Marketing Style Playbook

But the biggest fact is - like it or not (I don't) it was the right record.

Whereas Friday wasn't.

Excellent piece DJones and a very good account of what happened.
JK Friday is a very different record altogether and more important than
that a 100% independent small label/no label release.

It is also the most well known record on the planet in terms of reach. Google
it and you will see that everyone on the earth knows about it (obviously those
with internet connections and YOutube). Gangnam Style will equally reach all people.

It is very unfair to compare apples and oranges and GS was done by a very slick marketing
machine and Friday was not. Friday is a more relevant new model release for us as we
do not have the marketing budgets of Universal. Both of course are huge records and
the sales of Friday is greater than Alex Day's huge hit, another example of the New Model
with Old Model guerilla tactics.

The question is how much real revenue is it generating for all the exposure.

I would really like to know that ratio.

Well, it's just gone onto the UK Top Ten sellers of the year 2012...

And I think the new model gets income from various places...

Youtube star Peter Oakkey aka Geriatric1927 being interviewed on SkyNews about the success of Gangnam Style.

Hi GG to answer your question, as a Youtube partner Psy (or rather his label)
would be earning around $3 for every 1,000 views. So if you multiply that by
1000 that becomes $3,000 for every million view and multiply that by 867 it comes
to a whopping $2.6m. The label should split that 50/50 as it is licensing income
but who knows what deal he has with them. Of course publishing should amount
to the same as its income is separate and is roughly the same. Give or take what
the rate is per CPM, all up I think it should have made the creators $5.2m.
Just for the Youtube views.

Spotify pays more than Youtube for the record label/artists.
They pay around $8CPM so for a million streams on Spotify you
will earn $8,000 so imagine if Gangnam Style had the same amount
of streams on Spotify it would earn 3 times the amount. But I suspect
it would not generate anywhere near that number of plays on Spotify.
The video is a huge driving factor for the song. I am not a fan of
the song itself, but credit where credit is due it has done great sales
as well.

Australia (ARIA) 6× Platinum 420,000^
Austria (IFPI Austria) Gold 15,000x
Belgium (BEA) Gold 15,000*
Canada (Music Canada) 4× Platinum 320,000^
Denmark (IFPI Denmark) Platinum 30,000^
Italy (FIMI) Platinum 30,000*
New Zealand (RIANZ) 2× Platinum 30,000*
Switzerland (IFPI Swiss)1x Platinum 30,000x
United Kingdom (BPI) Gold 400,000^
United States (RIAA) 2× Platinum 2,678,000

Just bearing in mind the above countries it has done around 4m sales.

So 867m video views translates to 4m sales 0.4% of viewers bought the song.
Of course we should not forget the ton of airplay and media coverage it got
as well but even so it is a good indication of how views on Youtube + main
stream media can translate to download sales. I would imagine it would have
received billions of radio "listens" and TV as well so its conversion rate
would be a lot lower say around 0.2% overall. This is a good ball park figure
for sale conversion from video/stream/radio listens.

In contrast Rebecca Black hardly got any mainstream radio play so is purely an
internet only phenomenon. As of now it has done over 200 million views. 160m
on the original Ark Music channel and around 44m on Black's channel.
It has done over 100,000 sales, the actual figure I
can't be too sure but based on the stats (according to Wikipedia) at around 30m
views it generated 100,000 sales roughly 0.3% conversion.

So for non-major label acts or acts without major mainstream airplay, look to
the Black model for a Youtube only driven hit (yes the meejah played their part)
and for major label or major mainstream media action look to Psy as a good blueprint
for number crunching. Of course these songs come once in a blue moon but hey why
not your blue moon.

I like to play devil’s advocate:

“as a Youtube partner Psy (or rather his label) would be earning around $3 for every 1,000 views.”

The major labels think they can earn (via VEVO) $30-40 for 1.000 views. No individual artist / small label will get similar terms.

“The label should split that 50/50 as it is licensing income but who knows what deal he has with them.”

US major labels pay nothing to their artists: Video views are regarded as promotion.

“Of course publishing should amount to the same as its income is separate and is roughly the same.”

It should. But at best it is the same ratio as with records/downloads: Publishers/writers earn about 10-15 per cent of the money earned by the owners of the sound recording. And in the UK it is - “thanks” to the bad deal PRS For Music did with YouTube - probably a lot less. In the US the publishers are trying to do individual deals (not via ASCAP/BMI) to get better terms (or use the synchronization right to earn extra money).

“So 867m video views translates to 4m sales 0.4% of viewers bought the song.”

A conversation rate of 0,5 % or even 1 or 2 % is ok if you have 500 million views. But how many artists from small labels or with no label get even close to these numbers?

“So for non-major label acts or acts without major mainstream airplay, look to the Black model for a Youtube only driven hit (yes the meejah played their part)”

Look at the list of the most viewed videos: only products form major labels.

"The major labels think they can earn (via VEVO) $30-40 for 1.000 views. No individual artist / small label will get similar terms".

Interesting point except the actualite is a lot different. For example a huge video hit on VEVO can get 100 million views or $700,000 in revenue (effective rate of $7 CPM).
So $30 CPM is a nice figure to aim for but unrealistic over a longer period of time. For the advertiser $30 CPM is more than TV considering you could get 300,000 viewers
watching your ad for $100 so the number of advertisers paying $30 CPM will be few and far between. Also VEVO is open to all so independent artists can get on VEVO
and then get all of the income derived from licensing to VEVO.

"A conversation rate of 0,5 % or even 1 or 2 % is ok if you have 500 million views. But how many artists from small labels or with no label get even close to these numbers?"

This is the issue. Indie artists and labels make a HUGE mistake following the Major Label approach. Major labels can afford to use branding style videos hence the low
conversion ratio but indie artists should follow a more direct selling approach which would mean a more robust and targeted video campaign such as what Alex Day is doing
who by the way is an indie artist with major label figures. There are a lot of indie artists doing hundreds of thousands of views and even millions of views. How much they
are converting is hard to tell but from the examples of a few who have made it public they are hovering around the hundred thousand sales mark.

"Look at the list of the most viewed videos: only products form major labels".

Not true. For a start have a look at this www.youtube.com/playlist?list=PLD7DD392E2E77E775 to see a list of the most viewed videos. You can't ignore the vast amount
of "non-music" video hits on Youtube none of which are major label artists. The whole point of my post is to crunch some realistic numbers for those of us who are non major label people. A more direct approach will see the views increase and the sales too.