Content matters: Paid YouTube channels? Plus streaming music and royalties, Microsoft Office on the cloud

Today we’re rounding up changes in consuming and creating content:

• Spotify, Pandora and other music-streaming services are shaking up the music world much like Apple‘s iTunes did a decade ago. As listeners shift from downloading to streaming, the New York Times reports, artists and the music industry are seeing royalties shrink. That’s because services such as Spotify — for which paying users shell out $5 to $10 a month to listen to music just about anywhere — pay a fraction of a cent in royalties each time a song is played, as opposed to the pennies on a dollar the music industry earned from a downloaded song.

Google last week revealed that the video of Psy’s viral hit “Gangnam Style” generated $8 million on YouTube — but that was after being watched 1.2 billion times, which works out to less than a cent per view. (More on Psy’s “Gangnam” riches here.) And if your music isn’t a viral phenomenon? The NYT article mentions one independent musician (a cello player) who last year reported she earned about $1,600 after her songs were played on Pandora about 1.5 million times over six months.

But the NYT piece ends with a prediction from Donald S. Passman, a top music lawyer, that might be a bit soothing to the industry: “Artists didn’t make big money from CDs when they were introduced, either… Then, as it became mainstream, the royalties went up. And that’s what will happen here.”

In other streaming-music news, San Francisco-based Rdio has launched free, unlimited music streaming for six months to 15 of the 17 countries where it’s available, including in the United States. After the six months are up, the company hopes users would have fallen in love with the convenience and sign up for a paid subscription. In the U.S., those cost $4.99 and $9.99 a month.

• Speaking of disrupting established industries, cable probably would do well to watch this development closely. YouTube will launch paid subscriptions in the spring, according to AdAge. No, this doesn’t mean the end of free YouTube videos. The report says the Google-owned service will focus on channels with content people might want to pay $1 to $5 a month to watch. In other words, it’s going to be serving up channels a la carte, something the cable industry has long fought against.

The paid channels — which AdAge’s unnamed sources say would probably number 25 to start — would be an experiment for YouTube, which has been working to move beyond the cat videos and other amateur videos for which it came to be known in its early days.

Last year, “Recipe Rehab,” a show that started on YouTube, was picked up by network TV while continuing to be available on YouTube. The show was part of a YouTube initiative to produce original programming.

• We turn from entertainment to work: Microsoft has released Office 365 Home Premium, cloud-based software available by subscription. Microsoft is offering the use of Office on up to five computers/devices (Windows and Mac) for $99 a year. Among the benefits the company is touting is that subscribers will be the first to receive up-to-the-minute updates  to Word, Excel, Outlook and the other software in the suite; extra SkyDrive storage; and an hour of free Skype calls a month.

Microsoft will continue to offer the software for a one-time download for a higher price, as well as the suite in a box.  But as CEO Steve Ballmer said in the company’s press release today, “this is Office reinvented as a consumer cloud service.”


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