'Harlem Shake': Making and Monetizing the YouTube Phenomenon (Video)

7:14 PM PST 02/14/2013 by Andrew Hampp, Billboard

There’s serious potential for Bauuer and label Mad Decent to pocket substantial revenue from the views of the viral smash.

Baauer’s “Harlem Shake” still has quite a ways to go before it becomes the next “Gangnam Style” in terms of total views, but the Mad Decent track became an unexpected viral smash last week at levels not seen since PSY’s American invasion -- and it’s already climbing up the Billboard charts. But how else is the song being monetized?

First some quick background for the uninitiated: the craze began with a video posted by YouTube personality Filthy Frank on his DisastaMusic channel on Feb. 2, featuring a basic template that has been spoofed over 3,000 times. Start with 15 seconds of one or a handful of people dancing in place to the song, then watch the video erupt into groups of people breaking out into spontaneous bursts of dance, shakes and other spasms via quick edits for the remaining 15 seconds. In the past week alone, Late Night With Jimmy Fallon, The Today Show, Ryan Seacrest and even indie-pop duo Matt & Kim have contributed just four of what have already been thousands of user uploads featuring the song.

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The late-week media spree was enough to boost sales of the Baauer single on iTunes to 12,000 for the week ending Feb. 10, according to Nielsen SoundScan, enough for the song to enter the Dance Digital Songs chart at No. 9 this week and No. 12 on Dance/Electronic songs. Expect the song to rise even higher next week, as a recent home-page push from iTunes sent the song to No. 3 on the iTunes chart by Thursday morning, where it remained behind Macklemore & Ryan Lewis’ “Thrift Shop” and Rihanna’s “Stay.” That’s enough to make “Harlem Shake” the “biggest thing we’ve released on Mad Decent as a label, and it’s happened within six days,” says Jasper Goggins, label manager of Mad Decent. “It’s really crazy. Every 15 minutes my mind is blown by something else.”

But also aiding in the song’s sales and ultimate revenue potential is YouTube’s Content ID system and a company called INDmusic, which inked a deal with Mad Decent in early 2012 to help monetize the label’s video views through pre-roll ads -- like a Vevo for indies, essentially. Since last Thursday, Feb. 7, INDmusic and YouTube’s automated ContentID have manually and automatically claimed over 4,000 user-uploaded videos featuring the song totaling over 30 million views by the afternoon of Feb. 14, according to YouTube’s Vivian Lewit, director of music content partnerships. Content ID allows rights holders to receive reference files on content they own, metadata describing that content and policies to help them choose what they want YouTube to do with that content -- monetize, track, or block it -- once they find videos that match.

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“As we’ve seen with overwhelming regularity, partners can monetize these uploads. The piece of content could have been monetizing from the ContentID match the minute these uploads began,” Lewit says.

And there’s serious potential for Bauuer and Mad Decent to collect substantial revenue from those views -- as the Wall Street Journal first reported in 2011, YouTube channel partners can collect up to 55% of revenues from every monetized view on the site, with a sizeable chunk of that 55% going directly to the owners of the song’s publishing and masters. And as Billboard reported in December, PSY’s team stands to collect as much as $2 million in revenue from YouTube views alone -- averaging $2 for every 1,000 YouTube views, per estimates reported by New York magazine.

INDmusic’s job, in part, is to help verify copyright claims on clips that ContentID may not have picked up and maximize the cost-per-thousand viewer, or CPM, rates on video views. The company has also been working to embed “click to buy” links for the song on user-uploaded videos to drive further downloads of the song on Google Play, eMusic, Amazon MP3 and iTunes. “We’re encouraging people to make these videos,” says Brandon Martinez, INDmusic’s co-founder and CEO. “We want users’ videos to have 1 million views, we’re just claiming the song so everyone can collect revenue.”

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Goggins credits the company for helping Mad Decent increase its revenue potential over the past year. “We get a lot more money from them than when we were our own YouTube partner,” he says, declining to specify just how much more on a percentage basis.

As for Bauuer, a 23-year-old DJ from Brooklyn currently on tour with Just Blaze, he’s kept a fairly low profile since the meme began. Lacking a Twitter profile and bearing only an “art track” of the song on his official YouTube page (1.3 million views compared to a user-uploaded clip that has over 5 million views, both claimed by YouTube and INDmusic), Bauuer himself has kept a remarkably low profile for a dance craze that’s started almost entirely without his direct involvement.

Goggins credits Mad Decent’s initial free giveaway of the song in May 2012 through its Jeffrees imprint for the initial interest. “We wanted the music to live on its own for a period of time, to be able to build a groundswell around the track so that when we took away the free download of the track people were fine to just go buy the track,” Goggins says. “The idea was to just get the song out there as far as possible, so this is kind of like a testing ground for what we do.”

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