Lyor Cohen has his eye on Spotify‘s throne.
Yesterday (June 2), Cohen – YouTube‘s Global Head of Music – revealed that YouTube paid the music industry over $4 billion in the previous 12 months via the “twin engines” of advertising and subscription revenue.
Cohen also stated that his platform’s aim is “to become the leading revenue generator for the music industry”. That would mean overtaking Spotify’s annual royalty payments, which in 2020 surpassed $5 billion.
Today (June 3), Cohen laid down the gauntlet to Daniel Ek and co once again.
Speaking at AIM’s Future Independents conference, Cohen claimed in his opening remarks that YouTube Music is now the “fastest growing subscription service out there”.
According to Spotify’s most recent financial results, its paid subscriber audience grew by 3 million between the end of 2020 and the end of March 2021 – reaching 158m globally at the close of Q1 this year.
The last subscriber figure to be publicly announced for YouTube Music came in October 2020, when Alphabet CEO Sundar Pichai revealed that YouTube had over 30 million YouTube Music and/or YouTube Premium subs, up from the 20m it counted at the end of 2019.
(Consumers can subscribe to YouTube Music as a subscriber to the app itself (standard individual price in the US of $9.99 per month) or via an $11.99 per month subscription to YouTube Premium, which bundles in access to paid-for YouTube Music.)
In today’s discussion – which also featured Because Music founder, Emmanuel de Buretel, and Nadia Khan, founder of Women in CTRL – Cohen stated that “independent artists, independent labels are exploding on [YouTube]” and that “their CAGR is the highest growth of any category”.
He added: “The thing that makes me the most excited about it, is the fact that [YouTube’s] leadership is starting to see this trend and build them much better products that help them remain independent.”
“YouTube’s growth for the Beggars business over the past couple of years has outpaced everyone as well as the market itself.”
Martin Mills, Beggars Group, speaking yesterday
Cohen’s comments follow yesterday’s statement from Martin Mills, Chairman of Beggars Group, who said: “YouTube’s growth for the Beggars business over the past couple of years has outpaced everyone as well as the market itself, and is now well on its way to deliver the potential of its huge audience to the music industry, as these revenue figures now show.”
Paul Pacifico, the CEO of AIM – the UK trade body that reps indies including Beggars, Secretly Group, Domino and many more – was also impressed with YouTube’s $4 billion announcement. He said: “These figures really underline the importance of YouTube’s partnership with music. We know that independent music punches above its weight on YouTube as consumption there is driven by fans.
“As increasing value is returned to the independent music community from all over the globe, we welcome the increasingly sophisticated tools that are being made available to further enhance the relationships between artists and fans and we look forward to continuing to work closely with the YouTube team to help our members maximise their potential.”
“Since Because Music signed with YouTube, we have seen constant growth both in terms of revenue and audience numbers.”
Emmanuel de Buretel, Because Music
Also commenting on YouTube’s news, Emmanuel de Buretel, Founder of Because Music, said: “Since Because Music signed with YouTube, we have seen constant growth both in terms of revenue and audience numbers.
“YouTube has been a great partner to develop an artist with, as it gathers streaming, playlisting, social media stats etc. with efficient analytics tools. We have seen that YouTube is constantly evolving to get closer to the artist and labels.
“Recently, independent artist Major Lazer reached 3 billion streams on the Lean On video, an incredible example of the global audience that can be reached when great indie music is combined with a strong partnership between YouTube, and 3 indie partners Because, Teamwork and Mtheory.”
You can read Lyor Cohen’s opening remarks from his appearance today at AIM’s conference in full below:
Boy, are we living in the most unprecedented times. Everything that we see in the world seems upside down. Whether it’s COVID or the conflict in the Middle East, the issues around Black Lives Matter, Asian hate, the transitions and governments. It’s pretty amazing to be a citizen of the world and watch what’s going on.
I have to say my heart goes out to all of those that are being affected. It’s just so upsetting right now what’s happening around the world.
You know, when I came to YouTube, I believed in its potential. I believe that it was part of shepherding the golden age of music. Yesterday we shared some growth stats and I’m really proud of them. YouTube paid over $4 billion to the music industry in the last 12 months and has added more paid members in Q1 2021 than any other quarter since its launch. That’s really really big.
“I’m especially excited about the independent community. It’s growing faster than ever.”
Over the years we built a world class music team that ranges between engineers and music experts. Together we worked tirelessly to create meaningful growth in music. It’s our honour and our privilege to be at your service. Our team wakes up every morning with a clear mission: to help artists and songwriters make a living and amplify and celebrate diverse voices.
We take this responsibility home every single night. It drives us to work harder, especially alongside you. Like I said, the world is upside down, but we feel that we’re actually helping the world be a better place and that’s what inspires us.
June is Pride Month and Black Music Appreciation Month and when I think about it, the breadth and quality of the music that’s coming into YouTube everyday, that diversity amongst artists and songwriters that are coming to YouTube to engage with their fans, it’s nothing short of an, ‘Oh my God’.
I’m especially excited about the independent community. It’s growing faster than ever. It’s amplifying voices, minority voices, all across the world and giving everybody a stage. Bravo to you guys. I so appreciate working with you all. It’s just amazing to watch.
The success of YouTube is really the twin engine growth story. We give users the choice to pay with their attention or their wallets.
We believe that our job is to meet the consumer when they are. In fact last week I was at the roadshow with a label and one of the executives brought their nine and 11 year old to join the meeting, because they were groupies of YouTube.
When the kids left I turned to the record executive and said, ‘They are obviously important consumers. They don’t have a job so they either riding your family plan or they are paying with their eyeballs’.
I can just tell you that we are the fastest growing subscription service out there. We know where the super leaned in people who are paying with their eyeballs – we know where they are.
“I can just tell you that we are the fastest growing subscription service out there.”
Not only do we advertise to them so we could earn our partners, you, money, but we also know when to shepherd them to subscription service. I love our product and I hope that you use our product. It’s the dopest product out there.
Of course there’s so many things that we need to get right but those are two of the most important focus areas that I spend, and my team spends, an enormous amount of time on. Of the $4 billion plus generated for artists and songwriters and rights holders in the last 12 months, as you read, 30% of it has come from UGC.
Fan powered videos have always flourished on YouTube, helping artists grow their audiences and break songs all around the world. It’s becoming a meaningful and incremental source of revenue alongside your premium content.
Being here is a huge opportunity for us to put some context around our overall music mission and to answer any questions that you may have. Independent artists and music entrepreneurs doing it on their own terms – those are my type of people.Music Business Worldwide