"Ad supported revenues from video streaming grew by just 0.4 per cent for UK labels last year, despite rapid growth in use of the platform."
“I believe that Lyor Cohen sincerely wants YouTube to be a positive force for music. That’s going to take more than words. It’s going to take a fundamental shift in YouTube’s business practices so that it pays for the music it uses at a level similar to competing services."
"Ad supported revenues from video streaming grew by just 0.4 per cent for UK labels last year, despite rapid growth in use of the platform."
“I believe that Lyor Cohen sincerely wants YouTube to be a positive force for music. That’s going to take more than words. It’s going to take a fundamental shift in YouTube’s business practices so that it pays for the music it uses at a level similar to competing services."

Geoff Taylor, Chief Executive BPI responds to Lyor Cohen’s blog Five observations from my time at YouTube". 

“Lyor Cohen argues that YouTube’s advertising business is growing rapidly, paying out more per stream than other ad-supported services and is now joined by a subscription business that together will drive the industry to “a more lucrative place than ever before”.  He praises the role of YouTube in breaking new artists and argues that safe harbours allow platforms like YouTube to give a voice to millions of artists, making the industry more competitive and vibrant.

Sounds good, right? But from a UK perspective, this ignores a few inconvenient truths:

  • Contrary to his claims, in the UK, at least, there is little if any growth in advertising revenues from YouTube. Ad supported revenues from video streaming grew by just 0.4 per cent for UK labels last year, despite rapid growth in use of the platform.
  • There is no YouTube pay tier in the UK (Red is still to launch) and, as yet, no effective funnel for users to Google Play subscriptions. YouTube isn’t helping to grow our subscriptions business, it’s undermining it. According to research from IPSOS, one in five internet users say they don’t pay for music because they get all the music they need from YouTube.
  • YouTube isn’t such a great music discovery service as it might like to believe. Research from AudienceNet and from IPSOS shows that two thirds to three quarters of YouTube music users use the service mainly to listen to music that they already know.
  • Rather than empowering the artist community, as Lyor argues, safe harbours take away an artist’s freedom to choose. Artists aren’t given the opportunity to decide whether they want their music to appear on the platform, or at what price.  For most artists, the only option is to accept pitiful compensation for the use of their work, at a rate dictated by YouTube – since effectively blocking use of their work using the Content ID tool (if it’s even available to them) is not realistic.

Safe harbours are hardly “a distraction” in the relationship between YouTube and the music industry. If the music industry is getting paid around 1/20th as much as it should by one of the biggest users of music on the planet, that’s a reasonable thing to obsess about.  The simple way for YouTube to fix its disconnect with the music industry is to confirm publicly that it does not qualify for safe harbour protection for music content, because it does not play a merely neutral, passive and technical role. This should be uncontroversial, given Lyor's claim that most music watch-time on the platform comes from a YouTube recommendation. 

I believe that Lyor Cohen sincerely wants YouTube to be a positive force for music. That’s going to take more than words. It’s going to take a fundamental shift in YouTube’s business practices so that it pays for the music it uses at a level similar to competing services. It can afford to do so. Alphabet, YouTube’s parent company, is on course for revenues of $100 billion this year. That’s bigger than the GDP of Croatia and Slovenia combined (according to the IMF).If Lyor can persuade the powers at Google to make such a change, he will be a hero to even more people in music.

Geoff Taylor, Chief Executive BPI