Why Lyor Cohen Won’t Change a Goddamn Thing at YouTube

Lyor Cohen

Why did YouTube just hire Lyor Cohen, a fat cat music industry executive?

You might not know who Lyor Cohen is.  Well, unless you’ve been in the music industry for a long time.  That’s not to diss Lyor Cohen, but DMN’s audience skews a lot younger.  They don’t know the old guard as well.

But Lyor Cohen is one of the biggest major label executives of all time, with a career dating back to the 80s.  He made a big mark in rap and hip hop, then moved up to the highest ranks at majors like Warner Music Group.  Then he started a company called 300 Entertainment, which focused on Twitter and music.

That failed, but Cohen is actually credited with forging a major YouTube alliance while at Warner Music.  The deal was considered the first of its kind, though these days, all three majors seem unhappy with their YouTube arrangements.

You might call Lyor Cohen an influential ‘fat cat’.  Or one of the bad guys, depending on your perspective.  I heard him speak at a conference a few years ago.  It kind of sounded like an older white guy talking hip hop, ‘street,’ or something like that.  It was pretty weird, but I got the sense it was part of a really effective persona.  He makes a lot of money.

So why did YouTube hire this guy?

The reason is that YouTube thinks Lyor Cohen is a connection back to the complaining, uncooperative music industry elite.  The cabal of very powerful major label executives that hate Youtube, but still need YouTube, and don’t understand YouTube.  Like Irving Azoff (who’s actually a powerful manager, who used to be a major label executive, but whatever).

So Cohen is the diplomat that can help YouTube Music better compete with Spotify, Apple Music, and even Amazon.  Maybe this is the guy that can help the music industry to stop hating YouTube.  Or that’s the idea.

“People HATE HIM!”

So YouTube sees Cohen as a guy with a huge, powerful rolodex, and a person friendly to streaming platforms.  A guy who can get people around the table to negotiate.  But the only problem with that theory is that not all of these ‘fat cats’ actually like each other.

Maybe Bob Lefsetz said it best.  “The only problem is people HATE HIM!” Lefsetz wrote in his Lefsetz Letter.

But there’s a much bigger problem, and it has to do with YouTube’s business model.  Basically, YouTube doesn’t want to change its compensation structure for music videos, because it actually doesn’t generate enough revenue to pay what the labels want.

Spotify is willing to pay more than 80% of its revenues back to the labels and rights owners, YouTube isn’t.  That’s important.

What else is YouTube unwilling to do?  Completely block videos from being uploaded by fans.  They’d rather pull down music videos in compliance with label demands, according to the outdated rules of the DMCA.  It’s an old, 90s law, and it’s working great for YouTube’s views and advertising revenues.

YouTube isn’t trying to be a good guy.  It’s a business that doesn’t really care about creators, which they view as a cost.  They’re not high on ethics, it’s not a profit priority for them.  It’s the classic Econ 101, soulless equation:

Traffic = revenue.  Revenue — costs (for content and everything else) = profit.

That’s the reality, and Lyor Cohen isn’t going to change that. Because if that was going to change, it would have already been changed.  There’s nothing new happening on that front.  No new variables, revelations, competitors, or external shocks.

So if the major labels want real change, they first need to block all of their videos from being played on YouTube via ContentID.  That’s step one.  Then, declare war on any uploader and harass the crap out of YouTube if anything ‘accidentally’ appears.

Then, they need to take YouTube’s daddy, Google, to court.  They need to focus their legal and legislative energies against a serious opponent, instead of pimple-faced coders in Ukraine.  The cases against pimple-faced coders are easy to win, but they have no impact on piracy.  A case against Google and YouTube, or a serious legislative change, would have a lasting impact.

The only problem with going against YouTube?  The labels need the exposure.  And YouTube doesn’t need music videos as much as the labels think they do.  Because the minute you tear down everything from YouTube, and keep it down, no one cares about your artist.

That’s the reality.  And it’s why YouTube can keep calling the major labels’ bluff.

And why a fat cat music executive won’t change anything.

 

Top image by Noa Griffel for 300 Entertainment, licensed under CC by 4.0.

 

12 Responses

  1. Anonymous

    Putting this out there: if Google wants to give me $5 million, I would also be willing to be publicly supportive of Youtube.

    Reply
    • Remi Swierczek

      Industry traitor not able to find creative way to $200B music business.
      With current outlook it is prudent to be kapo in Google/YouTube music camp!

      Reply
  2. Anonymous

    “Maybe this is the guy that can help the music industry like YouTube more”

    More? 🙂

    Reply
  3. Doesn't Matter

    Did 300 fail? They’ve got tons of popular artists, and now Lyor’s at Youtube, though they still have a talented team. They seem to be doing much better than most.

    Reply
    • Cmonbro

      This dude is an idiot for saying that.. Fetty Wap and Young Thug are two of the biggest artists of the last 3/4 years… and the label has what 22 ppl. I know majors wish they could be that lean

      Reply
  4. Unpopular Truth

    Music industry is too damn greedy and think they are so much more important than they actually are. Music is just background noise anymore. People would rather put their time into things like TV, Movies and Video Games. Music is inferior to these on its own.

    Reply
  5. Geography lesson

    The name of the country is “Ukraine.” There’s no “the” in front of it. You wouldn’t call it “the Italy” or “the Mexico” would you?

    Yes, it used to be called “the Ukraine” when it was part of the USSR, but that was 25 years ago.

    Reply
    • Paul Resnikoff
      Paul Resnikoff

      It’s strange, some of my family came from *the* Ukraine. So maybe that’s why I always call it that. But good update, I appreciate that feedback. I will be a more sensitive citizen from here on out.

      Reply
  6. Listen to Yourself

    The ONLY thing ever said in article on this entire site that has ever actually mattered:

    “YouTube can’t change its compensation structure for music videos, because it actually doesn’t generate enough revenue to pay what the labels want.”

    So, there’s really nowhere to go.

    Music is simply not worth $1.29 a song to consumers. The only reason they ever paid that is because there was no alternative. No, there are.

    Reply

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