The Evolving YouTube Economy: Why AdRev Acquired DashGo

Google the phrase “YouTube economy” and the first results that come up are…a bunch of videos on YouTube about the economy.

Maybe Google, which owns YouTube, doesn’t want it to be too obvious about the financial ecosystem that is YouTube. But with a little digging, it’s not hard to find some stats that point to YouTube’s economic impact: 1 billion+ unique visitors per month with 6 billion+ hours watched, 100 hours of video uploaded to YouTube every minute, with more than a million advertisers using Google ad platforms on the site.

Now, what percentage of all those millions and billions of YT hours contain music? That’s a tougher question to answer, but whatever the number is, it’s big, and therefore there’s big business embedded within.

AdRev’s acquisition of DashGo gives a look inside the business of YouTube and music.

One company that’s keenly aware of that is LA-based AdRev, which currently stands as the world’s largest YouTube music administration service, based on number of videos claimed and monetized, views per month, royalties paid and assets under management. Via their YouTube music monetization service, micro synchronization-licensing platform and multi-channel network, AdRev currently represents over 6 million music copyrights across 27.5 million YouTube videos – that’s almost a collective 3 billion views per month.

This big player in the YouTube economy has just diversified itself, with the just-announced acquisition of DashGo, a digital music distributor/marketer which allows artists, labels, and publishers to distribute, promote, market, and license music across digital retailers, subscription services and Internet radio.

Since being founded by CEO Ben Patterson in 2004, DashGo’s client base has expanded to include independent labels and artists such as Delicious Vinyl, Weezer, Record Collection, David Hernandez’s DH1 Media, Coconut Records, John Frusciante, Rock Mafia, plus over 10,000 other artists. Joined together, the companies are hoping to prove a new force in rights management, whose rapidly changing landscape values expertise in content licensing, distribution, and administration.

In an interview with SonicScoop, Ryan Born, CEO of AdRev, provided a deeper look into the move, and some sharp insights on how YouTube economics are unfolding before our very eyes – and ears.

Ryan, what made now an ideal time in AdRev’s evolution to acquire DashGo?

We’ve grown rapidly over the past 3 years (Inc Magazine, as part of the 2014 Inc 500, ranked us the #2 fastest growing media company in the USA based on our actually 3 year revenue growth) and we have been looking to expand our rights management offering from various angles.

Distribution made a natural fit as the technical infrastructure for delivering assets, monetizing, and accounting and reporting lined up well with our existing YouTube Content ID administration and rights management business.  Our clients that distribute records commercially have been utilizing other distribution companies, and surveys and market research among our client base led to the conclusion that there was a nice opportunity for us to move into distribution and better service the needs of these clients with a high level of personal service that we provide to our YouTube rights management clients.

DashGo’s CEO Ben Patterson is a great entrepreneur with deep experience in marketing and rights management and DashGo’s team, in particular Tate Palmer and Jeremy Vilela, were the perfect fit for our company culture and mission to be the next leader in rights management for the digital era.   Furthermore, DashGo’s incredible client base including David Hernandez’s DH1 Media, Coconut Records, Rock Mafia, and Katy Tiz, to name a few, provide us with an amazing foundation to nurture and expand upon.

We added Brian Felsen, formerly the president of CD Baby from 2008 to early 2014 to our team back in August and when we put all the pieces together, we’re poised to continue on our growth with a fantastic team, industry leading technology, and expanded suite of services.

Ryan Born is CEO of AdRev.

How will the acquisition directly benefit artists and publishers — in other words, why it is important/beneficial to them to have one resource offering this bundle of services?

Clients that commercially release their recordings will be able to have one point of delivery and a single point of contact for a number of revenue streams, instead of having to go through a number of different providers. Being very highly client and service-focused, we feel that having a single point of contact — or at least one less point of contact — for various rights management and distribution needs is a nice differentiating factor to our offering.

For music publishers specifically, we will continue to grow their revenue with our manual claiming technology and team that constantly mine YouTube for missed detections, covers, and live versions and are always open to discussing additional opportunities like micro synchronization for those that are open to issuing such licenses.

What are the potential challenges for AdRev that come with depending on the “YouTube Economy”? Are there changes that YouTube could make to the way it distributes revenue that could disrupt your business model?

YouTube continues to grow rapidly and we are super bullish on the future of YouTube both from a video consumption perspective — i.e. moving audience from TV/film and other formats — as well as from the music streaming side of things, with the recent launch of YouTube Music Key.

Yes – there is the possibility that YouTube could make some changes but I feel that we have become an important partner to YouTube and they value our relationship highly so whatever changes may come, we expect to be at the forefront and will continue to adapt our technology and product to maximize revenue for our clients.

We saw you quoted as saying that there will be future M&A activity by AdRev. What do you feel you have the opportunity to build with AdRev, if you diversify your portfolio correctly?

Some folks may not know this, but we (AudioMicro, Inc., parent company of AdRev and now DashGo) currently operate a micro synchronization platform at AudioMicro.com that provides synchronization licenses to lower budget/small dollar video producers – including the leading YouTube MCNs (Multi-Channel Networks) which are nearly all clients of ours, a YouTube MCN of our own (called the AdRev Talent Network) with over 2,500 channels and growing, and a photo library at ImageCollect.com with over 6,500,000 images (i.e. still photographs) that we license to leading newspapers, magazines, and bloggers.

We look at ourselves not only as a YouTube rights management company or a music distribution service, but from a more over-arching perspective as a media company that licenses, distributes, monetizes, and administers content in all formats.  Whether its music (both sound recordings and compositions) via AdRev, DashGo and AudioMicro, videos via the AdRev Talent Network, or photos via ImageCollect, we make a great partner for content rights holders to work with to optimize various revenue opportunities in the new media environment.

Expect us to incubate and launch further products and services in house and where it makes sense, to look to acquire more complementary companies that fit into our vision (like DashGo) by way of further M&A.

— David Weiss

Please note: When you buy products through links on this page, we may earn an affiliate commission.