YouTube income for labels based on advertising has dropped by 20–30%, particularly when film soundtracks fail to break out or movies do not garner organic traction, industry executives said. This has been evident in the case of several films recently with the exception of action hit Dhurandhar whose soundtrack found instant draw across platforms. At the same time, short-form content, especially Shorts, has emerged as a key focus as viewing behaviour shifts.
“YouTube was built as a platform that is all things for all people, and not simply as a music service. Although in the last decade and a half, music became an integral and scalable part of the overall consumption on the platform, now other forms of content are making more noise as YouTube replaces traditional TV,” said Mandar Thakur, chief executive officer, Times Music.
“As a result of that consumption shift, YouTube is also playing catch-up to a newer generation of music fans and there is a significant drop in income for music within that area as advertisers also change their spend habits,” he added.
Algorithm at work
Gaurav Dagaonkar, co-founder and CEO at Hoopr, a music licensing platform, said there has not been a deliberate move by YouTube to deprioritize music as a category. Instead, the platform is leaning into an audience-first, engagement-driven algorithmic model.
“Discovery today is governed far less by content labels and far more by how viewers behave—signals such as watch time, retention, repeat listens, and contextual relevance now determine visibility,” Dagaonkar said.
“For music, this means performance is increasingly dynamic. Reach can fluctuate not because music is being sidelined, but because discovery is tied directly to how audiences are engaging with a track at any given moment—whether they’re watching through, replaying, sharing, or interacting across formats like long-form, Shorts, and connected content.”
“In that sense, music is being treated no differently from any other content vertical,” he added.
In response, labels are recalibrating their playbooks. There is a sharper focus on data-led marketing, Shorts-first release strategies, deeper creator collaborations, and regionally rooted storytelling that mirrors how audiences consume music today, Dagaonkar said.
At the same time, labels are diversifying revenue through sync licensing and brand partnerships, reducing dependence on any single platform or algorithm and building more resilient, multi-channel monetization models.
YouTube’s view
A YouTube spokesperson said the company wants all creatives to thrive on its platform and that its revenue-sharing business model means it succeeds only when its partners do.
“To ensure a healthy and equitable global ecosystem, our agreements with our music partners should remain fair and reflect how users consume content across genres on YouTube today. Our ‘twin engine’ of ads and subscriptions are key revenue drivers, and we remain as committed as ever to collaborate with our music partners,” the spokesperson said.
From July 2024 to June 2025, YouTube paid out over $8 billion to the global music industry.
Beyond music
Industry experts agree that YouTube is no longer just a long-form video or music platform. Short-form content—especially Shorts—has become central as consumption patterns evolve.
“Micro stories, influencer-led formats, live content and creator-driven entertainment now command massive daily watch time. YouTube is investing in making these formats monetisable and scalable,” said Tusharr Kumar, CEO of media and entertainment company Only Much Louder.
“It is less about replacing music, comedy or more established genres and more about expanding the ecosystem to match how audiences consume content today,” Kumar said. At the same time, YouTube is tightening its rules to reward original, engaging content and reduce low-effort uploads—a broader revision aimed at improving quality and fairness rather than deprioritising music.
Music continues to drive large watch hours and payouts, Kumar added, but revenue calculations—especially in short-form contexts—are evolving in line with YouTube’s broader platform strategy.
