Baauer’s “Harlem Shake” was the first single by an unknown artist to enter the Billboard Hot 100 chart at number one. Here we examine how it happened and derive broader implications about the monetization of YouTube content based upon the context of the song’s success.

The “Harlem Shake” is a dance track written by young DJ/producer, Baauer. Following the song’s creation in May 2012, it was posted online where it began attracting interest from other DJs who used it in remixes, and promoted it on their websites. Eventually, Baauer landed deals with a management company, PR company, booking agency, and record label.

About one year after Baauer wrote “Harlem Shake”, an amateur comedian named Filthy Frank posted a video on YouTube using the song as the basis for a skit involving strange dancing, masks and outfits. During the first half of the video, Frank and his crew dance casually, a spectacle that is contrasted starkly with their ridiculous, brightly colored, one-piece body suits and masks. Once the beat drops, the scene transforms into an absurd dance party. Only a few days later, some of Filthy Frank’s fans had posted their own imitation videos.

Kevin Ashton is an MIT Engineering graduate who has been tracking “Harlem Shake’s” online activity.1 In his piece, “You Didn’t Make The Harlem Shake Go Viral – Corporations Did,” he proposes a theory explaining the “Harlem Shake’s” journey from comedian skit to viral sensation.

The Superbowl aired a few days after the Filthy Frank video. During the power outage, major brands used the incident to market their products via social media. “A few advertising agencies reacted quickly via Twitter, Facebook and YouTube: Walgreens pointed out it sells candles; Oreos reminded people they could still dunk their cookies in the dark; and Tide said it could not get your blackout but it could get your stains out.”

The following day, Forbes ran an article describing the Superbowl situation as “real-time marketing” and many brands, therefore, began focusing on finding a viral meme.2 Some companies created their own “Harlem Shake” imitation videos filmed in their offices, in hopes of catching the next viral wave and increasing visibility.

The flurry of social media buzz surrounding those videos was picked up by television talk show hosts, who proceeded to broadcast their own versions of the “Harlem Shake” on TV. It was not much longer before the concept went viral, taking the song with it, as thousands of “Harlem Shake” videos began pouring into YouTube.

Monetizing the “Harlem Shake”

It is important to note that the Billboard charts have recently updated their formula to include YouTube activity. Without this amendment, “Harlem Shake” probably would not have made it very far on Billboard – the song is not played in heavy rotation on radio stations and has not generated major sales.

Not only did YouTube help Baauer debut at the summit of the Billboard charts, it has also become a direct source of revenue.

In the past, going viral on YouTube represented free advertising that would position artists to make money later. Today, it is becoming increasingly possible to monetize YouTube clicks and views. A CPM (cost per thousand viewer rate) is negotiable between YouTube and media content owners. Songs are tracked by YouTube’s automated software, ContentID, which notifies a song’s copyright owners, who then have the option to tell YouTube to either block, track or monetize it via advertisements.

Musicians are seeing profits from YouTube. The CPM for Psy’s “Gangnam Style” was high enough to ultimately net the artist $2 million. There also seems to be an emerging middle class of musicians who use their YouTube presence for cash flow. U.K. artist, Alex Day, does not tour, is not signed to a label, and relies mainly on iTunes sales and YouTube for monthly revenue. “Typically I make around £3500 a month from YouTube (I’m on a network so they can sell the ad space higher) and at least £10,000 a month from music and merch sales,” 3 says Day. Recently, he released an album in the U.K. on the same day as Justin Timberlake and charted higher than the megastar on iTunes.

Similar to Day, Baauer’s “Harlem Shake” is also tied to a network – in his case, INDMusic. Before “Harlem Shake” exploded, a partnership was already in place between Baauer’s record label, Mad Decent, and INDMusic. Every time someone uploads a video of themselves dancing to “The Harlem Shake”, INDMusic works with YouTube’s ContentID to collect advertising revenue for Mad Decent.

In some ways, companies like INDMusic resemble Performing Rights Organizations like ASCAP or BMI. They track copyrighted material, take a percentage of the money they collect, and deliver the rest back to copyright owners. Despite INDMusic’s percentage cut, Jasper Goggins, the label manager of Mad Decent, claims to be making more money using INDMusic than when the label had a direct partnership with YouTube.4

In just one week following the explosion of the “Harlem Shake”, over 3,000 videos featuring the song were posted per day, which resulted in 103 million YouTube views that could be monetized. Apparently, YouTube was able to charge an average of $2 for every thousand viewers, for a total collection of $206,000. INDmusic collected one-tenth of that and another 45%, or $92,750, went to YouTube. Executives familiar with the terms of such YouTube channel deals told Billboard that 10% of the latter amount was paid to the person who uploaded the video; the remainder was distributed between the master rights owners and publisher, and Mad Decent was both. In short, 103 million views translated to roughly $83,500 for Mad Decent.5

Conclusion

Remarkably, it is the crowd, not the musician, generating the revenue in cases like this – Baauer’s “Harlem Shake” does not even have its own official video. The framework YouTube and its partners are putting into place is changing what was formerly considered copyright infringement into a viable business model. For example, INDMusic is currently working to promote purchase links to the copyrighted song on user-generated videos.

In today’s music industry, it is common belief that only the consumer wins. However, strategies like YouTube’s are capitalizing on the “Direct-to-Fan” movement and building structures through which everybody benefits.

Perhaps more importantly, the entertainment industry can begin to make peace with its fears surrounding online piracy and see online services like YouTube as hotbeds of opportunities rather than enemies. Trust between copyright owners and consumers can also be rebuilt. It never seemed healthy for content owners to punish their fans for sharing music online without a license but, for a while, it seemed like the only resort. Now, fans are invited to participate in the process, leading to mutual gains. By working together, YouTube, music consumers, record labels, emerging artists and small startup companies like INDMusic can find ways to profit symbiotically from media file sharing.

By Emilie Bogrand

Endnotes

1. Ashton, Kevin. “You Didn’t Make The Harlem Shake Go Viral – Corporations Did,” Mashable, Mar 30, 2013. http://mashable.com/2013/03/30/harlem-shake-corporations/

2. Rooney, Jennifer. “How Advertisers Made The Superbowl Power Outage Work For Them,” Forbes, Feb 3, 2013. http://www.forbes.com/sites/jenniferrooney/2013/02/03/how-advertisers-made-the-super-bowl-power-outage-work-for-them/

3. “Musician Alex Day Explains How He Beat Justin Timberlake In The Charts Basically Just Via YouTube.” TechDirt, Mar 24, 2013. http://www.techdirt.com/blog/casestudies/articles/20130324/01115322434/musician-alex-day-explains-how-he-beat-justin-timberlake-charts-basically-just-via-youtube.shtml?utm_source=dlvr.it&utm_medium=twitter

4. Schneider, Marc. “Harlem Shake: The Making and Monetizing of Baauer’s Viral Hit,” Billboard, Feb 15, 2013. http://www.billboard.com/articles/news/1539277/harlem-shake-the-making-and-monetizing-of-baauers-viral-hit

5. Hampp, Andrew. “How Four-Person INDmusic is Monetizing the ‘Harlem Shake’ Meme for Mad Decent,” Billboard, Feb 26, 2013. http://www.billboard.com/biz/articles/news/digital-and-mobile/1549767/how-four-person-indmusic-is-monetizing-the-harlem-shake