Lyor Cohen’s blog for YouTube (which we ran a news alert on yesterday evening) was always going to ruffle feathers. But then again Cohen has never been one to not ruffle feathers. Just under a year into the job as head of music at the video-sharing platform, this blog offered his most detailed overview of what YouTube means for the music industry. He picked five areas for consideration and offered these as lenses through which to judge the service, namely: subscriptions are the long game; why the “ad hustle” is good for the music industry; why YouTube pays more than most ad-supported platforms; why YouTube is key to breaking new acts and how he’ll make it even better; and why safe harbour is a good thing (and how Content ID really works at scale if you want your music monetised or removed).

That final point about safe harbour – given the high-profile label-led lobbying at both Congress and the European Parliament – was always going to be the one that pressed the detonator for the wider music business. However, one senior music industry executive, speaking off the record for now, told us they were confused as to what was actually new here. “It reads like mostly same old talking points dressed up,” they said. “Also, does dismissing the concerns of entire global music community about abused safe harbors advance the conversation in a meaningful way?”  

Trade bodies such as IFPI, RIAA and BPI have yet to issue full reactions, but we can be sure they are coming. In the meantime, other industry voices have squeezed their thoughts into 140 characters – and are, as one might expect, less overjoyed and convinced by Cohen’s proselytising now he has crossed the floor.

Michael Dugher, CEO of UK Music, responded to Cohen’s claims that obsessing over the safe harbour exemptions was a “distraction” for everyone in the chain. “It’s not a distraction – it’s fundamentally important,” tweeted Dugher. “The people who create the music and invest in it should be fairly rewarded. End of.”

Matt Pincus, CEO of SONGS Music Publishing and a board member of both the NMPA and ASCAP, added, “Would be a more credible statement if @youtube hadn’t been hiding behind safe harbor for years.”

Meanwhile, Enzo Mazza, the CEO of Italian trade body FIMI, had this to say. “‘Safe harbours’ was a distraction while #YouTube grabbed the money from rightsholders ! #valuegap.”

Singer-songwriter Michelle Shocked also piled in. “The real distraction caused by a focus on copyright safe harbor? Discussing value gap caused by @YouTube monopsony!”

These are just a handful of views from different parts of the industry, all responding quickly to Cohen’s post. Due to space issues on Twitter (Cohen’s blog ran to over 1,200 words), they had to pick their targets carefully and so they all zoomed in on the safe harbour issue which they feel has given YouTube the ability to act (seemingly) with impunity. Music Ally is, however, more intrigued by Cohen’s claims to pay far better than other ad-supported platforms. “At over $3 per thousand streams in the U.S., YouTube is paying out more than other ad supported services,” he wrote. He argued that, due to differences in global ad rates, the overall figure gets “diluted by lower contributions in developing markets”.

We can expect those receiving royalty payments (low as they feel they are) to run the numbers here and take serious issue with his “$3 per thousand streams in the US” point. Given he also indirectly dissed Spotify and Pandora in his post, it will be interesting to see if they rise to the bait. Spotify, should it so wish, could point to the 60m global subscribers it has as proof of its free-to-paid conversion funnel really working while also adding that YouTube has never made its premium subscriber numbers public.

Our off-the-record executive added, “Even if YouTube really did pay $3 per thousand streams, is that something to be proud of? That’s more than 50 hours of music listening for less than the price of a cup of coffee. YouTube pays far less on both a per-stream and per user-basis than other services. It pays seven times less than Spotify, which also has both an ad-supported and paid version.

Last December, reacting to YouTube’s claim of paying $1bn to music rightsholders in 2016, Sony/ATV boss Martin Bandier was less than impressed. “They paid out $1bn but, you know what, we should have been paid $5bn,” he told Music Ally. “It’s the largest music service in the world and it’s an exceedingly difficult service for all of us to deal with.”

Let’s see if other industry heads are as willing now to put an exact price on what they see as YouTube’s payment shortfall. Will they double down on the safe harbour issue or will they now see payments as a new means of attack and start to publicly demand $15 (or more) per thousand streams in the US?

EarPods and phone

Tools: platforms to help you reach new audiences

Tools: Kaiber

In the year or so since its launch, AI startup Kaiber has been making waves,…

Read all Tools >>

Leave a comment

Your email address will not be published. Required fields are marked *