Lyor Cohen reinvented the music business – and then he did it again, and again. But the industry veteran, who built Def Jam, reinvigorated Warner and set new rules for the record industry with 360 deals and other inventions, now faces his toughest task yet as global music head of YouTube, a service that’s been a focus of ire from labels and artists for years.
Next week, YouTube will launch YouTube Music, a new standalone music-streaming platform that offers ad-free listening as well as a premium subscription tier. On the eve of its debut, Cohen, steady and straight-faced, sat down with Rolling Stone to talk about the future of the still-precarious music business and his thoughts on Kanye West and streaming services’ new hate content policies.
Tell us about YouTube Music and what it means to be launching this.
We’re super psyched we’re here. The reason why I came to Google and YouTube was because I believed that there’s such an enormous opportunity for the artist community, the labels, the consumers. For YouTube not simply to be an advertising platform but also to build upon what is already the world’s largest place where music is consumed and to help build the connective tissue with the labels and to partner with them. And we heard them loud and clear. They wanted us to be in both businesses, advertising and subscription. Because they believe that the future of our business is with two engines – where advertising and subscription live side by side. I was telling my wife last week, be careful what you wish for, because I’ve been screaming how great this product is for a long time and let’s put it out – well, it’s upon us and I realize there’s a million and one things we have to do.
You acknowledge YouTube is late to the game with this new service. So how do you convince fans to sign on?
I think the most music is consumed on YouTube and there are people that want YouTube to build a really incredible subscription business. So aside from the traditional marketing that happens above the line, there will be a lot of ways that the consumer will know about our new offering inside the app. I think this is not a winner-win-all category. There is plenty of opportunity for many players to be successful. We want to demonstrate that not only are we really good in advertising – we’re the best in advertising – that we could also convert many of those that are in our ecosystem to a subscription service if they want it. When you look at the data, even though we are late to the party, it’s a nascent category still. A lot more people are going to decide to get a music subscription service.
“Even though we are late to the party, it’s still a nascent category.”
YouTube has had a fraught relationship with the labels in the past. What does the debut of YouTube Music, the premium tier, mean for your relationship with record labels?
The fact that we’re working back-to-back with the industry is a result of us hearing our partners. They said they wanted us to not simply be the best in advertising but also develop a subscription business. I think the industry is excited because one of the greatest fears the industry is having is they could wake up one day and it could be just two distributors. That’s not good for artists or labels or the consumers. And 30 years ago a guy called Russ Solomon could rent a warehouse, buy a bunch of records, and put the name Tower Records on it. Now you have to have a shit ton of engineers, you have to have a global footprint and you have to have a lot of capital. And there’s not too many people raising their hands to do that.
You mentioned in the past that you took the role at YouTube to “give a gift back to the industry.”
Bringing diversity to distribution is the greatest gift that can be given. If distribution is controlled by two people, they will capture all the value. If there’s four, the value will creep back to the artist and the labels. I think competition is healthy. Most mature media businesses are a combination of advertising and subscription. So let’s not be surprised. I know everybody is in love with what subscription has done for the industry, but the combination of advertising and subscription is the place that we are going to be really thought leaders and industry leaders.
What’s the missing factor in subscription music streaming that you’re hoping to add with YouTube Music for listeners?
What rang my bell is the feature that YouTube Music knows when I’m about to go to San Francisco and I often don’t remember to cache my music. So the fact that it’s backed by intelligence and already cached my favorite music for the journey so I can listen on the plane – it’s just the intelligence they built off the Google context servers.
But it seems like there’s a battle going on right now between services trying to get the same thing; getting people to pay for music, but going about it in totally different ways. How do you see YouTube’s place in that?
Building the best product and having this enormous funnel and giving the consumer choice, whether they want to continue paying with their eyeballs or deciding to pay for a subscription service. Just the choice. It’s good for consumers to have the choice. We have a really powerful advertising business and are going to build a really powerful subscription service. We wanted to make sure that we heard the industry. And they want two engines on the plane.
“I adore Kanye. He was instrumental to Def Jam Recordings and I don’t abandon people.”
What have the conversations with labels been like?
Really healthy. Originally we were only resourced to negotiate with them and we would come back every three years and that’s how there’s no connective tissue, and mistrust. And now they see us working alongside them. Working on their labels and their artists.
Spotify has been in the news recently for its new hate content and hateful conduct policies. What’s your reaction? Did you know they were going to do that and are you planning something similar?
I think there’s a lot of internal discussions about how to think about things like that. We’re having a lot of internal discussions. I did not know in advance, but, no, I wasn’t surprised. We’re still having those discussions.
The tech world seems to shoulder more responsibility for that kind of thing, being socially conscious, than the record labels and that side of the music business. Do you feel more of that responsibility in this role?
I don’t look at myself – I try to stay the most authentic person to myself and they certainly don’t need a music guy trying to be a tech guy. So I’ve just stayed a music person that happens to work in tech. I’m only focused on bringing connective tissue between Google and YouTube and the industry. In terms of responsibility and what a person’s tech responsibility or record company’s is – I think that those are internal discussions – I hate to categorize it as a tech move or a record move.
Certainly I remember when [Public Enemy’s] Professor Griff said all those [anti-Semitic] things. The entire industry told me to drop Public Enemy; they said, refuse to work with Public Enemy. I actually don’t believe that. I believe in education and talking through things and trying to bring people on. After [the comments], I invited Public Enemy to tour the Holocaust Museum, so he could see the journey between artists and Jewish people. And he saw those posters. I think everybody’s got a responsibility and they should talk about what their company wants to communicate – I love that people are actually having the dialogue and being responsible and talking about it. That’s good.
Lastly, we have to talk about the Kanye photo. The reaction to it was quite polarizing, and to some of the things he’s said and done. Do you stand behind it?
There’s a lot there. First of all, I adore Kanye. He was instrumental to Def Jam Recordings and I don’t abandon people. The responsibility to the artist community is so critical – if we keep focused on the artist and the consumers, we’re going to have a very successful time. Our responsibility is like I said, to connect artists and people most likely to enjoy their music. If we can do that, the consumer wins and the artist wins.