Lyor Cohen talks music videos, AI, and YouTube hitting 125m paid subcribers
YouTube‘s ‘twin engines’ of subscriptions and promoting seem like firing on all cylinders.
As revealed final week, the platform added +25 million subscribers over the previous yr to achieve 125 million paid YouTube Music and Premium subscribers worldwide, together with trials.
YouTube’s subscriber development story as we speak turns into a lot clearer whenever you evaluate it with that of Spotify, the world’s largest subscription music platform.
SPOT added +27 million internet paying subscribers in the 12 months to the end of December 2024, reaching 263 million paying customers.
At a time when questions are being requested concerning the velocity of music subscription’s development trajectory, YouTube is getting quicker, not slower.
When YouTube introduced that its subscriber depend had hit 100 million a yr in the past, that determine had grown by +20 million since November 2022.
No shock, then, that Universal Music Group Chairman and CEO Sir Lucian Grainge cited YouTube Music on UMG’s Q3 earnings call in October as having “turn out to be one of many fastest-growing gamers in subscription.”
In the meantime, YouTube’s advert revenues throughout your complete platform reached $10.47 billion in This autumn alone – the primary time the platform’s advert income surpassed the $10 billion mark in a single quarter.
The platform’s father or mother firm, Alphabet/Google, doesn’t disclose how a lot of that advert income was pushed by music alone, however YouTube confirmed again in 2021 that music accounted for 25% of watch time on the platform globally.
The worldwide music enterprise will probably be eager to understand how a lot of that advert income goes to music rightsholders. The latest music business payout quantity shared publicly by the platform was in September 2022, when YouTube announced that it had paid music rightsholders over USD $6 billion within the 12 months to the tip of June 2022.
That determine marked a $2 billion improve from the $4 billion contribution to music rightsholders that YouTube mentioned it paid out within the prior-year interval (the 12 months to finish of June 2021).
It was additionally double the dimensions of the cash that YouTube mentioned it paid to the music industry in the calendar year of 2019 ($3 billion).
“The dual-engine development story is an actual factor. And the larger the engines, the higher it’s.”
YouTube additionally confirmed in September 2022 that some 30% of the $6 billion-plus it delivered to music rightsholders within the yr ending June 2022 got here particularly from UGC (user-generated content material). Which means, on the time, YouTube was paying music rightsholders someplace near $2 billion yearly in advert income generated from UGC.
With YouTube’s whole advert income and paid subscriber numbers rising considerably since these figures have been disclosed, it’s truthful to imagine that the platform’s annual contribution to the music business has elevated too, however that determine isn’t publicly obtainable simply but.
YouTube’s World Head of Music, Lyor Cohen, tells MBW that he’s nonetheless bullish about YouTube’s purpose of turning into the primary income contributor to the music business globally.
That title is at the moment held by Spotify, which paid out USD $10 billion to the music business in 2024 – $1 billion greater than it did in 2023.
“We aren’t going to cease till we turn out to be the primary income supply, not simply the most effective associate.”
Lyor Cohen
Cohen says that YouTube is “not going to cease” till it claims the No.1 spot, nevertheless, and cites a fable with an ending most of us know to clarify his long-term model for the platform:
“That is just like the turtle and the hare,” he says. (For British-English readers questioning concerning the title of this fable… ‘turtle’ replaces ‘tortoise’ in American-English.)
Provides Cohen: “Now we have an extended imaginative and prescient. We’re dedicated to constructing merchandise that the followers actually look after and the place followers are, that’s the place you’ll discover the music business and the artists. We aren’t going to cease till we turn out to be the primary income supply, not simply the most effective associate.”
Discussing YouTube’s newest subscriber milestone with MBW, Cohen says he’s “elated”.
“I’m not thrilled merely for all of the 1,000 people-plus which have contributed to this milestone, however I’m thrilled for the business,” he says. “Individuals are most likely uninterested in me saying this, however the twin-engine development story is an actual factor. And the larger the engines, the higher it’s.
“All this implies is more cash for artists and songwriters, artist growth, and A&R signings. I’m additionally thrilled for the patron and the followers that [use] our music app. There’s no higher music product than our music app.”
Right here, Lyor Cohen discusses his ambitions for YouTube’s positioning within the music business and the way constructing a worldwide music subscription enterprise “shouldn’t be for the faint-hearted…”
YOu talked about this being just like the competitors between the turtle and the hare When it comes to turning into the primary contributor of income to the music business. When do you expect that YouTube will win that race?
I can’t predict that. I did say by 2025. That’s clearly not going to occur. We’re both primary or quantity two, relying on the account and what nation, however we wish to be primary globally. And we’re dedicated to placing within the work.
Are you aware if the subscribers that YouTube is including are being acquired from different platforms, or these new subscribers who’re being added into the music ecosystem who didn’t beforehand subscribe to a platform?
I believe they’re new subscribers. And we haven’t even gotten to the switching [from other platforms] problem but.
We needed to construct a world-class platform. We needed to take our time, take heed to the business, take heed to the followers, course appropriate, and iterate. I believe we’re slowly feeling very bullish about attempting to handle switchers, however up to now, that has not been our focus.
YouTube is increasing the premium lite service to us customers This week. Are you able to inform me about that funnel from premium lite to full premium consumer?
Nicely, that’s finally the purpose – to present somebody a extra introductory alternative and have them actually dig the expertise of not paying with their eyeballs, however truly subscribing.
With out naming any providers, Do you’re feeling like rivals available in the market have an unfair benefit when it comes to having the ability to give music away free of charge primarily through ad-supported providers?
No. And by the best way, I don’t have a look at anyone investing in music as competitors. I have a look at those that are investing in music as comrades in arms to make the world a greater place.
In relation to your query about promoting elements of platforms; we respect all shoppers of music and really feel like they need to be validated.
“The dual engines must be rising on either side.”
We must always meet the patron the place they’re, and in the event that they wish to pay with their eyeballs, we should always give them the utmost respect.
We must always attempt to work on ensuring that we improve monetization. We’re promoting premium merchandise, so the advertisers ought to acknowledge the truth that that is premium and that our promoting {dollars} ought to develop as properly.
The dual engines must be rising on either side.
Tiktok was working a music service in a handful of nations around the globe, and so they closed their premium music service. What does that inform us concerning the wider streaming market, and the way aggressive it’s to thrive in it?.
Let me let you know, constructing a worldwide music subscription enterprise shouldn’t be for the faint-hearted. It takes actual dedication.
Now we have the best engineers, led by John Harding. Now we have the best UX individuals led by Dee Pace [Director of UX]. Now we have the best product individuals led by T. Jay Fowler [Director of Product Management] and Will Aldrich [Director, Product Management].
It’s a must to have the best engineers, product and UX [execs] and the most effective world-class advertising individual. That’s Jodi Ropert [Vice President, Marketing at YouTube].
You may’t half-ass constructing a worldwide subscription enterprise. It takes a variety of effort and a variety of capital, and naturally, it’s a must to recruit probably the most gifted individuals on the planet.
There’s a variety of speak in the intervening time about launching pricier tremendous fan tiers with totally different perks. Have you ever thought of doing that at YouTube, or would your companions prefer to see it occur?
There’s a variety of power, focus and discussions across the superfan. We’re always analyzing alternatives with different skews, and our full consideration goes to Premium Lite to be sure that it launches in probably the most elegant and constructive manner.
After which we’ll begin excited about iteration and totally different skews, however we now have a variety of work across the superfan and considering via the superfan, and so on.
We’ll be extremely excited to see the progress made with the opposite platform launching it.
What are your ideas on the evolution of, and your predictions for, the long-term significance of music movies on YouTube? And How necessary will music movies be for artists sooner or later?
Thanks for asking that query, as a result of that’s one in all our high priorities: visible storytelling. I’m considering [a lot] concerning the music video. You understand, the lounge is the fastest-growing display screen [for] YouTube.
There’s a variety of unbelievable and constructive indicators we now have concerning the alternative of video and storytelling. There’s a variety of [music] releases per day, and so we predict that video storytelling actually helps contextualize songs.
We’re not all in favour of simply breaking songs. We wish to break artists, and video storytelling is one important basis block.
It’s additionally been the most expensive line merchandise of the music business. If there’s a manner via AI that we might assist scale back the price of visible storytelling and enhance the standard, I believe it will be an actual present that we might give our companions and artists and followers.
Actually we’re doing a variety of work on discovery and ensuring that the Premium music video and storytelling is entrance and middle and we’re very enthusiastic about it.
Final yr we noticed Facebook‘s father or mother firm meta determine that they didn’t wish to license premium music movies anymore. There’s a concern available in the market that the excessive demand for short-form video content material is consuming into the demand for longer-form, premium music movies. For a platform like YouTube that gives each shorts, but additionally premium music movies, how do you strike a steadiness in order that the 2 codecs can exist and thrive collectively in the long run?
I believe it’s a fantastic query, and one which may be very close to and expensive to us. We wish, like I mentioned, to have a way more nutritious consumer expertise, the place they could uncover new artists and their favourite artists in Shorts, however they go deep with lengthy kind.
And it’s humorous to say that the premium music video is taken into account lengthy kind. I keep in mind after I was digging via [vinyl] crates and flipping via [records], however each infrequently I’d contact one thing and pull it out.
Think about that’s the Shorts, and the second I contact it, I truly transfer you over to what you pulled out, the speaking heads, and provide you with interviews or movies of stay performances that make you expertise the artist in a deeper and extra satisfying manner than only a flippant manner.
I’m not an enormous fan of scrolling in isolation. It’s a approach to uncover, however the nourishment is your skill to find one thing but additionally to go deep, and find yourself cherishing discovering that artist and [sticking] that artist’s poster on the wall, and standing in line and going to reveals and assembly your neighborhood of followers.
Once we have been talking about music movies, you talked about the us of AI to decrease the price of making them. What are you doing when it comes to AI and your funding in AI instruments on the platform?
We’re going to introduce Veo 2. It’s already within the Dreamscreen on Shorts, but it surely’s additionally going to come back to the longer kind [videos].
It’s an extremely highly effective AI device that means that you can immediate and create cinematic content material.
Would you say that the AI instruments obtainable to YouTube in collaboration with Google is a major aggressive benefit for YouTube?
Yeah, it’s. And the hot button is to do it thoughtfully, responsibly, and boldly. Our superpower is the deep partnership we now have with the music business, and we set ideas early on.
We additionally imagine and agree that AI goes to assist energy and contribute to human creativity. We actually imagine that [AI] goes to make issues extra artistic and extra fascinating. And also you’re proper, it’s a part of our aggressive benefit that we get to work with an unbelievable firm like DeepMind.Music Enterprise Worldwide
