PSY cashing in on 'Gangnam' YouTube fame

Park Jae-sang, aka PSY, performed "Gangnam Style," which

Park Jae-sang, aka PSY, performed "Gangnam Style," which has made him a viral success and a wealthy man, at the American Music Awards show in Los Angeles. (Nov. 18, 2012) (Credit: AP)

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SEOUL, South Korea -- As "Gangnam Style" gallops toward 1 billion views on YouTube, the first Asian pop artist to capture a massive global audience has gotten richer click by click. But the money from music sales isn't flowing in from the rapper's homeland South Korea or elsewhere in Asia.

With one song, 34-year-old Park Jae-sang -- better known as PSY -- is set to become a millionaire from YouTube ads and iTunes downloads, underlining a shift in how money is being made in the music business. An even bigger dollop of cash will come from TV commercials.

It's a striking change in fortune for PSY, who in 2004 protested the U.S. military presence in South Korea; during a concert, he sang about killing "Yankees." On Friday, he apologized to Americans "for any pain I have caused by those words."

PSY and his camp will rake in at least $8.1 million this year, according to an analysis by The Associated Press of publicly available information and industry estimates. But for online music sales in South Korea, he'll earn less than $60,000.

Here's how it works.

"Gangnam Style," with its catchy tune and much imitated horse-riding dance, is the most-watched video on YouTube ever. The viral video has clocked more than 890 million YouTube views since its July release, beating Justin Bieber's "Baby," which has racked up more than 808 million views since February 2010. PSY's official channel on YouTube, which curates his songs and videos of his concerts, has nearly 1.3 billion views.

TubeMogul, a video ad buying platform, estimates that PSY and his agent, YG Entertainment, have raked in about $870,000 as their share of the revenue from ads that appear with YouTube videos. The Google Inc.-owned video service keeps about half.

PSY and YG Entertainment also earn money from views of videos that parody his songs.

"Gangnam Style" has been downloaded 2.9 million times in the United States and has been a chart topper since its debut, according to Nielsen SoundScan.

But earnings from downloads in PSY's homeland are far from an embarrassment of riches. South Koreans pay less than $10 a month for a subscription to a service allowing them to download hundreds of songs or have unlimited access to music streaming. That makes the cost of a downloaded song about 10 cents. The average price for streaming a song is 0.2 cent. PSY's cut for downloads is 14 percent. That falls to 7.5 percent for streamed songs. Yes, 7.5 percent of 0.2 cent.

According to South Korea's national Gaon Chart, "Gangnam Style" was downloaded more than 3.6 million times and streamed around 40 million times as of November. That adds up to a little more than $61,000.

It's TV ads that are the real moneymaker for the most successful of South Korea's K-pop stars. PSY has been popping up in TV commercials in South Korea for top brands such as Samsung Electronics and mobile carrier LG Uplus.

Chung Yu-seok, an analyst at Kyobo Securities, estimates his commercial deals could amount to $4.6 million this year.

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