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30 July 2021

YouTube’s Lyor Cohen on the most “vilified” aspects of streaming

Once described as “the most controversial man in the music business”, the former Warner executive is now head of music for YouTube – and on a mission to change streaming’s bad reputation.

By Andrew Harrison

Why would one of the most significant figures in the music industry choose 2021 to relocate from New York City to London, where the music business faces its own special post-pandemic headaches? 

True, a Covid-captive audience led to a surge in the streaming of recorded music on Spotify, Apple Music and others: the number of audio streams rose by more than 20 per cent in the UK in 2020 compared to the previous year. But pressures including the shutdown of Britain’s £1.3bn live music sector are expected to halve the size of the UK music industry, removing an astonishing £3bn from its contribution to the economy. 

The live music industry, formerly the great hope to replace lost revenue from falling physical record sales, must now attempt to recover from the pandemic in a post-Brexit world in which EU travel and visa restrictions have rendered touring ruinously expensive. (The Culture Secretary Oliver Dowden’s remedy was to suggest that bands instead perform in those hotbeds of rock ’n’ roll action, Norway, Iceland and Liechtenstein). The question is whether the streaming technology that once traumatised the music business can now resurrect it.

“So why am I coming to England?” says Lyor Cohen, the pugnacious 61-year-old Israeli-American executive who is now global head of music for YouTube. “To be helpful. And because I love it.” Cohen started his career in the bruising world of hip hop, looking after artists from Public Enemy to De La Soul, then ran Def Jam Records, before becoming chairman and chief executive of the recording giant Warner Music. On Cohen’s first day at Russell Simmons’s Rush Productions management company in 1984, he recalls, he was told that Run-DMC’s tour manager had gone AWOL before the rap trio’s first UK tour. “Who is the replacement?” Cohen asked. “You are,” they said. So he got on a plane to London. 

“I was so blown away by my first impressions of England, of the love for the hip hop art form, the mix of black people and white people, the kids blasting their whistles at shows,” he says. “I couldn’t believe how inclusive it was. It was a love affair.” 

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Cohen’s reputation is a formidable one, both as a diehard defender of hip hop and an implacable businessman. The producer Irv Gotti once called him “the coolest white dude in the game”; the industry bible Billboard described him as “the most controversial man in the music business… a record exec whose reputation is more brawler than bridge-builder.” Loud, larger than life – he’s 6ft 5in tall – an engaging motormouth and man who revels in business as a contact sport (“I thrive in the friction and the grind”), he is someone you’re glad to have on your side of the table and terrified to see on the other.

Many in music saw it as a betrayal when in 2016 Cohen moved to YouTube, a platform that some at the time criticised for not paying artists enough for streaming their music. Today Cohen emphasises that in the year to June 2021 YouTube paid $4bn to the music business from its ad and music subscription services, gaining on the streaming pioneer Spotify, which paid more than $5bn in royalties in 2020. The message seems to be getting through. The New York Times recently reported that “YouTube isn’t the music villain anymore”. Is Cohen doing what Aneurin Bevan did when doctors complained about the new NHS in the 1950s and simply stuffing his critics’ mouths with gold?

“Why do I talk about the $4bn so much?” Cohen says. “Because money talks and bullshit walks, right? Access to audience is great but money feeds families, pays songwriters, pays the eco-system.” His goal, he’s said, is for YouTube to become nothing less than the leading revenue-generator for the music industry. So what does YouTube have that Spotify or Apple Music doesnt? 

[see also: How a new campaign aims to fix a broken music industry]

“A twin-engined growth story,” he replies. “Having a healthy global advertising business alongside a subscription business is meeting the consumer where they are. All today’s big acts were small acts once, and I want artists and writers and musicians to capture the value, not distributors. The only way they can do that is if there are many different distribution players, and Google and YouTube could provide that diversity.” YouTube’s global reach via our phones, he says, means that artists no longer have to be at the behest of labels and talent scouts to make it. “You don’t have to be in London or New York to be discovered on YouTube. You can come from Lagos or Liverpool, anywhere. All those reasons are why I took the job, although there were many people ready to point their quill at me and call me a traitor.” 

Those deep in the music business, however, might find Cohen a little disingenuous when he speaks of YouTube introducing competition into the game. While the Department for Digital, Culture, Media and Sport’s (DCMS) long-awaited report into the economics of music streaming (released some days after our conversation) criticised the three major labels for their failure to remunerate artists, it also drew attention to YouTube’s “ongoing competitive advantage” over its rivals which it derived from User Generated Content (UGC): those myriad cat videos and viral clips of kids dancing to uploads of copyright songs which YouTubes Content ID” system now tags and monetises retrospectively.

Evidence submitted to the report found YouTube accounted for 51 per cent of annual music streaming yet contributed only 7 per cent of its revenue in 2020. And some 30 per cent of YouTube’s business consists of UGC. Under EU provisions known as “safe harbour” – now transferred into UK law – YouTube is not liable for copyright infringement on UGC as long as the platform puts it right when it finds out. This means that YouTube is in a unique position where it negotiates its rates after the tracks are uploaded, not before. The DCMS found that UGC gives YouTube “a competitive advantage over other services and undermines the music industry’s leverage in licensing negotiations”, suppressing the overall value of the digital music market.

While the DCMS recommended a Competition and Markets Authority (CMA) investigation into the major labels and streaming in general, it singled out YouTube, saying the CMA should consider giving the platform a “strategic market status” designation to encourage competition with its products. 

Any competition investigation is, of course, a matter for government and there are doubtless years of lobbying ahead on the issue. But when I spoke to Cohen, he was bullish on the topic of UGC. “It’s the most vilified part of YouTube and that makes me so sad,” he says. “If you ask an artist about a fan using their song and they get remunerated, what is wrong with that?”  

The naive view of the music industry is that it’s divided between doe-eyed lovers of artistry and the ruthless executives who prey upon them. In my experience there’s a little of each in everyone in the business, and Cohen certainly evinces a fan’s enthusiasm when talking about his role in the growth of hip hop, rhapsodising about the names he worked with (“Eric B & Rakim! A Tribe Called Quest! Stetsasonic! EPMD! Big Daddy Kane!”). At Rush Productions he “learned to collaborate with the system, to beach-head in people’s hearts and not fight them”.

So I’m surprised to learn that when it came to one of the first great crossover moments for hip hop into the MTV white mainstream, Run-DMC’s collaboration with Aerosmith for “Walk This Way”, the hip hop group’s manager  the self-confessedly “very commercial” Cohen  was against the idea. “I didn’t understand why it was necessary for Run-DMC and I fought it.” The band, he says, were going to be rock stars anyway; “Walk This Way” devalued them. 

“I liked Run-DMC being a real big secret to a bunch of people,” he says. “Things were going so well, we were dropping big, big joints that white people were getting into on the fringe in an organic way. ‘Walk This Way’ circumvented that. It was the beginning of the end for Run-DMC. I understand what it did – but I would have preferred not to have done it.” 

Cohen has already seen several year-zeros in music as a hip hop foot soldier and then a mogul heading up Def Jam and Warner. The question is what he can achieve in this third act of his career, with the music business upended yet again. He won’t say the pandemic has been good for a home-streaming service like YouTube – that would be tasteless – but the business has grown, especially digital live shows (“the living room is our fastest growing screen”). He is certain of one thing at least: live music is not dead. 

“There’s no killing the live industry. You can fake it digitally but one day you have to go mano a mano with your fans. The live performance is the moment of truth and I believe the live industry will come back in spades.” 

In the meantime, the charm offensive continues. Can Cohen persuade the music business to love the platform it used to hate? “Listen, you can get mad at YouTube or Google,” he says. “It’s harder to get mad at Lyor.” It is. But a few billion dollars doesn’t hurt either.  

[see also: Can Bandcamp save the music business?]