Psy Makes $8 Million By Giving It Away
Psy's "Gangnam Style" is an international phenomena that only comes around once a decade or so. Artists lucky enough to catch the tiger by the tail tend to become one-hit wonders ("Macarena" anyone?), and that's why you hope that the artist cashes in - it may be the only chance they'll ever have. In these days of fewer record sales and more streaming, there's an ever greater chance that the revenue from a huge hit will be smaller than ever. In many cases, the artist (more accurately their management) goes for tight copyright control to squeeze every last dime out of the song, which in these Music 3.0 days can be short-sighted.
That's not the case with Psy, however, who's hands-off attitude to copyright infringement has led to at least $8 million, not counting any concert or appearance fees he's collected. Here's how it works, according to an article in the Associated Press:
"Gangnam Style" now has over 880 million views and counting, but Psy has over 1.3 billion views of all the videos on his channel. His income from that is about $870,000 according to estimates by TubeMogul, but don't forget that he has to split that with the company selling ads, then his management takes a piece as well. That's not all that much money for the huge number of views involved. Surprisingly enough, the US leads in views of the song.
The song sells for $1.29 on the iTunes Store and has been downloaded nearly 3 million times, which after Apple's split equates to around $2.6 million.
In Korea, subscription music is much more the norm than in the US, and most people pay around $10 per month. The song was streamed over 40 million times and downloaded around 3.6 million, but that only amounted to around $60,000.
Psy has sold 102,000 CDs in Korea which earned him only $50,000 (sounds low to me), but given that CD pirating runs rampant in Asia, you can bet that there were a lot more sold that he never saw a dime from.
This is where the big payoff comes from. Reported Psy has made around $4.6 million for commercials for Samsung (he's the face of their new refrigerator) and mobile carrier LG Uplus.
There are no figures on this but you can figure that whatever other revenue he's made is dwarfed by his performance fees, probably by at least a factor of 10 even on the conservative side.
The irony of all this is that Psy actually comes from money as his father, uncle and mother own a large chunk of a South Korean semiconductor manufacturer. Guess what? As soon as Psy hit #1, the stock more than doubled, and the family had an unexpected windfall.
So the take-away is that by using the song as promotion and not worrying about anyone stealing it for the gazillions of parodies, "Gangnam Style" became a global sensation that continues to pay off for Psy. The time he can ride this is limited, but he's managed to maximize the hit in every possible way. But he's not even the biggest grossing K-Pop artist, believe it or not, at least until his new album comes out in March.