Here’s a fun one for you before the weekend.
YouTube and parent company Google are believed to be pumping $60m into a new music venture run by an entertainment industry veteran.
That’s according to multiple MBW sources, who tell us that although the project won’t be a ‘record label’ as such, it will invest cash in artists’ careers on a global scale.
In one sense, this isn’t a completely new approach from YouTube: it has, for example, previously bankrolled heavy promotion of its platform’s star personalities, including Michelle Phan, Bethany Mota and Zoella.
Google has also backed a music biz startup before: in 2013, it injected around $5m into Lyor Cohen’s ‘content company’, 300 Entertainment.
300 typically signs 360-degree deals with artists and focuses on digital asset creation. Last year, it broke US hitmaker Fetty Wap (pictured), whose channel on YouTube has clocked up more than 750 million views to date.
Cohen’s firm also works with artists like Young Thug and T-Wayne, as well as partnering with up-and-coming music execs and independent labels, such as Quality Control Music.
After 300 was unveiled, a Google spokesperson said: “With YouTube, we have a long history of supporting artists and content creators.
“We’re excited to invest in 300, a new, innovative company designed to create opportunities for artists.”
Now, they’re at it again.
The most likely candidate for a Google/YouTube-backed new music launch, then, must be some kind of asset creation venture.
Apple Music has moved into the world of funding videos for artists such as Drake and Coldplay – traditionally a function of an artist’s record label.
Could the owner of the world’s biggest video platform now do the same?
(YouTube’s previous investment into creators includes its Original channels, which feature hi-spec productions from the likes of PewDiePie and Lilly Singh.)
Conspiracy theorists will note that today’s news comes bang in the middle of YouTube’s frosty re-negotiation with the major labels over licensing rights for their giant catalogues.
Universal’s long-term deal has already expired, and the company remains on a month-to-month rolling contract.
YouTube showing its ability/willingness to create commercially exploitable assets for artists – without a record label ‘middle-man’ – would no doubt be a useful, sharp-edged tool during these talks.
(To that end, just imagine if YouTube used the $60m to finance an operation like Live Nation’s Maverick; gaining a direct business relationship with a consortium of blockbuster managers and their artists.)
The investment gains an extra layer of intrigue when you think about another of Google’s other recent bets in music: Google Ventures led a funding round in Kobalt Music Group last year, to the tune of… $60m.
YouTube has made an even more recent financial play for a music business, of course: buying direct-to-fan business BandPage for a reported $8m in February.
BandPage specializes in connecting an artist’s digital profile with their commercial wares.
Could YouTube’s new investment be the next step in an attempt to turn its gigantic billion-plus user-base into a more lucrative audience for musicians?
Ultimately, the music industry’s reaction to the new venture will depend on one factor: whether it’s designed to discover and promote stars making their name on YouTube – or aiming to wield financial influence amongst blockbuster, major label-signed artists.
If it’s the latter, prepare for fireworks.Music Business Worldwide