Lyor, Lyor, YouTube Debate Fires Up

YouTube Head of Music Lyor Cohen has been shot down in flames this month after claiming in a controversial blog post that the much discussed YouTube ‘value gap’ doesn’t exist, adding that YouTube pays out more than other streaming services for ad supported streams. Cohen was also dismissive of industry concerns regarding safe harbour laws aimed at protecting online platforms over user-generated copyright infringement.

The former Def Jam and Warner Music executive claimed that he was “optimistic” about the future (which is probably not difficult if you are employed by Google), stating: “We (the labels, publishers and YouTube) must shine a light on artist royalties, show them how much they make from ads compared to subscriptions by geography and see how high their revenue is in the US and compared to other services”.

He added: “For instance, 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 US, YouTube is paying out more than other ad supported services”.

This immediately raised the ire of several industry representatives including UK Music, the RIAA, the BPI and industry veteran Irving Azoff, who accused Google of “fake news”, telling Music Business Worldwide Goodfellas style: “I don’t understand why YouTube in general, and Lyor in particular, aren’t being more transparent. Who do they think they’re bullshitting?”

When was the last time Lyor went to Irving’s house for a cup of coffee?

RIAA Chairman & CEO Cary Sherman was also quick to condemn Cohen’s claims in a blog post published at the end of last week describing YouTube as a platform that “hurts musicians… jeopardizes music’s fragile recovery and gives YouTube an unfair competitive advantage that harms the digital marketplace and innovation”. Sherman added that the $3 per stream ad-supported payouts to rights-holders claimed by Cohen was way off the mark.

UK Music Chief Executive Michael Dugher responded with a tweet refuting Cohen’s comments about arguments around safe harbor being a ‘distraction’, saying: “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”.

All in all, Cohen’s post seems to have endeared the music industry to YouTube and brought them much closer to their tech overlords. He may as well have sent them a postcard saying: “Dear Comrades, life is good here on the other side of the fence. If you can’t beat us, join us and what is so bad about eating peanuts for breakfast, lunch and dinner anyway?”