Industrial Context - Contemporary Context

How do companies finance, distribute, and exchange their products?

Music companies primarily finance music videos through multiple methods.
The first is Record Label Advances:

• Major record labels will often allocate a budget for music video production
• This budget is usually a part of the overall recording deal and is paid out to the artist or their representatives for the video's production

The second is Advertising Revenue:

• Videos can gain revenue through advertisements on platforms like YouTube, with a portion of the revenue going to the video creator or owner
• On average YouTube pays around $0.01-$0.03 per view

The third is Licensing Fees:

• Companies can purchase licensing rights to music videos for use in TV programs, promotions, and music television channels. The licensing fees for these are distributed to the music video rightsholders
• Businesses playing music videos in public, such as gyms or nightclubs, also need to pay licensing fees

Other Revenue Streams include:

• Digital Downloads
• Sponsorships
• Streaming Royalties
• Affiliate Marketing
• Touring and Live Performances
• Merchandise Sales

Where music videos used to be primarily shown on music video based television stations such as MTV and VH1, the distribution model has moved heavily towards digital platforms in recent years, with streaming and video-sharing websites like YouTube, Facebook, Instagram, and Vevo being the primary Channels. Independent artists can also share their videos on these platforms making it much easier to become successful independently. Audiences can easily access these videos online for free, increasing the number of people watching and listening to the product, boosting it's popularity.