YouTube’s head of music Lyor Cohen has admitted that “there’s still a disconnect between YouTube and the rest of the industry” but maintains that the company is keen to continue building bridges with music rightsholders.
“I get why some in the music industry would be skeptical of their relationship with YouTube. They were late to the subscriptions party and YouTube’s focus for many years was largely just on ads,” he wrote in a blog post today.
“While they have been at subscriptions for a year, and the numbers are very encouraging, YouTube must prove its credibility when it comes to its ability to shepherd their funnel of users into paid subscriptions. But since I’ve been here, I’ve been incredibly encouraged by what I’ve seen. The team is serious about subscriptions.”
Cohen referred to a recent deal struck with Warner Music Group as proof of YouTube and Google’s determination to attract more subscribers, with plans to merge the YouTube Red and Google Play Music service already underway.
He also defended the ad-supported tier of YouTube – and, indeed, ad-supported music-streaming more generally.
“Some think ads are the death of the music industry. Ads are not death. Death is death. Irrelevance is death. Fans not being exposed to new music is death. My time at YouTube has me convinced that advertising is another powerful source of growth for the industry,” wrote Cohen.
“YouTube’s ads hustle has already brought over a billion dollars in 12 months to the industry and it’s growing rapidly. Combined with YouTube’s growing subscription service, they’ve now got two engines taking the industry to a more lucrative place than it’s ever been before.”
Cohen also criticised music rightsholders’ attacks on YouTube for the size of its per-stream payouts compared to audio-only streaming services.
“Critics complain YouTube isn’t paying enough money for ad-supported streams compared to Spotify or Pandora. I was one of them! Then I got here and looked at the numbers myself. At over $3 per thousand streams in the U.S., YouTube is paying out more than other ad supported services,” he wrote.
“Why doesn’t anyone know that? Because YouTube is global and the numbers get diluted by lower contributions in developing markets. But they’re working the ads hustle like crazy so payouts can ramp up quickly all around the world. If they can do that, this industry could double in the next few years.”
Cohen went on to promise that YouTube is working on “new ways to promote and break artists and their albums so they have a chance to shine on the platform and connect with their fans”, before taking a shot at rightsholders’ focus on the legal issues around ‘safe harbour’ protection for services like YouTube.
“Safe harbour has become an obsession — with many complaining it’s the cause of all of industry’s woes. I’m not parroting the company line when I say the focus on copyright safe harbours is a distraction. Safe harbour helps open platforms like YouTube, Facebook, Soundcloud and Instagram give a voice to millions of artists around the world, making the industry more competitive and vibrant,” he wrote.
“Every artist should be concerned if their music shows up online without credit or payment. But YouTube’s team has built a system in Content ID that helps rightsholders earn money no matter who uploads their music. As of 2016, 99.5 percent of music claims on YouTube are matched automatically by Content ID and are either removed or monetised.”
“Before Content ID, when a fan shared a song with a friend through a mix tape, it was called piracy. Now it’s generated over $2 billion for content owners and goes far beyond what the safe harbour provision requires.”
We’re going to place a strong bet that we’ll have some reaction from rightsholders and industry bodies to Cohen’s blog post over the next 24 hours. We’ll keep you posted. For now, Twitter has already yielded some spirited responses:
It's not a distraction – it's fundamentally important. The people who create the music and invest in it should be fairly rewarded. End of. https://t.co/wYhMwmIoqE— Michael Dugher (@MichaelDugher) August 17, 2017
A distraction for YouTube perhaps https://t.co/gLf3g2KWyT— helienne (@helienne) August 17, 2017
Hard to accept safe harbour is a distraction – it is still the problem for most creators! https://t.co/G0eqKYv61j— Dennis Collopy (@themenace1) August 17, 2017