I did a quick test Google search for “how to legally upload karaoke tracks to YouTube.” The first thing that came up was a Quora page where someone had asked that question and was given terrible advice. The answer was that karaoke falls under fair use*; there wouldn’t be any issue, provided you own the production (audio master). It’s a testament to how little people know about copyright law as it pertains to music on YouTube.
My next stop was an article of almost 9k words explaining copyright and YouTube. Following the article was an extensive thread of people asking the author about applications of the law; the discussion has been going for more than three years. Needless to say, copyright and YouTube is no easy subject, and the rules can change anytime. That being said, there are plenty of success stories like one of my favorites, Boyce Avenue. Other notable artists who have risen to the top relying largely on covers and hard work include Lindsey Stirling, Pentatonix, Peter Hollens, and The Piano Guys.
The actual answer to the original question is a little complicated, but it’s more simple than it used to be. YouTube has deals with most large music publishers and a simple way to look up specific songs to see what the publishers will do if a cover is uploaded. If you navigate to “Creator Studio” then “Create” on the sidebar, you’ll see a library of free-to-use music and “Music Policies.” The latter allows you to search for songs and hope for the best. Unfortunately, almost every song says “Ads can appear” under the covers heading. What this means is that, once Content ID has tagged your video, the copyright holder will most likely make a claim for most (or all) of your ad revenue. If you’re an established artist, this may not be an issue; most of your revenue probably comes from other sources like selling song downloads, merchandise and touring. Covers that don’t generate money also still generate traffic for your videos that do allow monetization. If all this sounds great, then you don’t have too much to worry about; mutes and takedowns are rare and most artists are flattered by covers instead of upset (especially if you’re making them money).
The issue comes when you rely on YouTube ad revenue, or you’re a school wanting to post student covers with no risk of breaking the law or losing your channel. YouTube claims there is plenty of revenue sharing to be done, but most songs don’t have it as an option. For this, wearethehits.com (WATH) is the only good solution I’ve come across. Similar to how YouTube negotiates blanket performance licenses with PROs, WATH already made agreements with publishers to share revenue with cover artists. Last time I checked, just about every song I typed in was available to cover (“White Christmas” isn’t there, but there are enough covers of that already). According to their site, they license over three million songs covering 95% of top hits. 3.5M videos have been uploaded through the site. They have agreements with EMI, Kobalt, Warner/Chappel, Sony/ATV and Universal, and a bunch of smaller publishers.
The history of the site is pretty simple. Larry Mills, a Sony/ATV employee, founded the site in 2011 with Sony’s catalog at his disposal. Sony CEO Martin Bandier then decided to sell the site to Mills to separate it from the Sony brand so other big labels would be willing to license out their catalogs. The plan definitely worked.
In general, relying on YouTube revenue as your only source of income is a bad idea; plenty of people do it, but the chance of making a living increase substantially when multiple revenue streams are utilized; for example, Pentatonix receives $15k+ from Patreon every time they post a new video (they also tour and have sold 1.4M copies of A Pentatonix Christmas). YouTube and just about every other online streaming service also regularly lower their payout rates to content creators, whether it’s by changing actual percentages or some algorithms. Right now, YouTube keeps 45% of ad revenue and pays out 55%. The actual amount varies by how much advertisers want to place ads on your videos, number of subscribers, actual minutes watched, comments, etc . . .; generally, channels that are exceptionally popular or in touch with an advertiser’s specific audience make more money per view than others. WATH takes 60 percent of ad revenue (assumedly to pay publishers and songwriters) and the cover artist keeps the other 45%. That’s only 22% of the original ad revenue charge to advertisers, but ~$4,000 for 10M views (just an estimate) is better than $0 and a deleted channel. The site also makes lyric videos out of artist covers to post on MetroLyrics, for which artists are compensated at 25%.
I’ll soon run a test to figure out the final piece of the WATH puzzle. Their agreement says they’ll pay out 80% of ad revenue for original works, but there’s a chance if an artist uses YouTube’s uploader for originals instead of the one at WATH, it won’t fall under the same agreement (update to follow).
Fullscreenmedia.co is one large competitor to WATH. They license music through WATH and keep half of the 40% you’d normally get if you went to WATH directly. Fullscreen does have some nifty tools for artist support if you want to manage your brand (post to social media, sell merchandise, etc . . .); in general, it’s best to use the most refined and specialized tool for each task instead of one-stop shops. Fullscreen does represent Kieth Urban, Red Hot Chili Peppers and a lot of other big acts, so there may be something there that’s worth the extra cut. Maker Studios was another competitor that negotiated cover royalties, but many creators spoke of a complete lack of benefits once the service signed more than they could handle. They were recently acquired by Disney, which dropped all but the best 1k of 60k channels. Such multi-channel networks (MCNs) need to be carefully considered since the benefits often don’t outweigh the cost.
If you’re an established artist with a lot of original songs on YouTube, something like Audiam or Tunecore is probably a better fit. Such services not-so-simply track down users and streamers of your original songs on YouTube and lots of other platforms, then monetize and collect on your behalf (among other services).
*Note for Teachers about Fair Use (it really doesn’t apply much outside education and commentary/parody)
Fair use has become a confusing term; most people ask around the internet instead of actually reading the guidelines. Generally, fair use applies to <10% (30-second max) of a musical work for a specific use (criticism, comment, news reporting, teaching, scholarship or research), for short periods of time, in small venues (like a single, face-to-face classroom). Multiple works by the same author shouldn’t be used in the same semester, nor should the same work be used from term to term. Even playing or performing music in a classroom counts as a public performance, though this is usually negotiated as part of the blanket license the school purchases each year. The fair use doctrine also loses it’s viability when the work becomes commercial or lessens the value/market of the copyrighted work. What’s definitely not covered by fair use is recording an entire song, then displaying it publically. For that, artists and teachers must negotiate public performance royalties (paid by the school and every other venues, like YouTube), mechanicals for each copy distributed (any audio file given away or sold, paid via the Harry Fox Agency at 9.1 cents per copy), and a sync license for synchronizing the music to picture (negotiated via WeAreTheHits or a similar agency). There are plenty of other guidelines for educational fair use outlined here at NAFME (with some pretty spicy unanswered case scenarios in the comments to show how clouded things still are).