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News May 10, 2017

YouTube’s Lyor Cohen “surprised” at WMG’s response to licensing deal

YouTube’s Lyor Cohen “surprised” at WMG’s response to licensing deal

Lyor Cohen has spoken out about YouTube’s deal with Warner Music Group and has directly addressed the in-staff memo sent from WMG CEO Steve Cooper.

Earlier this week TIO reported Warner Music Group had become the first major to ink a new deal with YouTube, and they really weren’t happy about it

This was made clear in a leaked memo to staff from WMG CEO Steve Cooper. Using phrases like “tough negotiations”, “very difficult circumstances” and “there can be no free-market”, Cooper said it was the best deal available.

Cooper’s dispirited reaction to the deal wasn’t surprising considering the fact YouTube currently hides behind “safe harbours”, aka laws designed to exempt passive hosting companies from copyright liability in the early days of the internet. But it did spark some concern considering the players involved.

As TIO mentioned previously, YouTube’s brand new Global Head Of Music is Lyor Cohen; aka legendary former manager of Run-D.M.C. and the Beastie Boys and Warner’s former chairman/CEO of recorded music until 2012.

Now, in an interview with Recode Cohen has said he wasn’t aware Cooper was sending a memo, and that the deal is centered around WMG’s “vision”.

“I was surprised,” Cohen told Recode‘s Peter Kafka, “because it’s not been the context or the tenor of the negotiations […] This deal is centered around their vision of helping us build a subscription business. And them encouraging us building the advertising business.”

Cohen said the deal enables YouTube to help the music industry return to growth through subscription and advertising revenue.

“This deal enables us to continue growing our subscription business around the world,” he said.

Essentially, YouTube needs the rights of each major label in order to continue expanding globally and pushing their subscription model, YouTube Red.

Interestingly, Cohen said the issue of safe harbours didn’t arise during negotiations:

“I didn’t hear anything about safe harbor, or any of that stuff,” he told Recode. “[…] I do know about the numerous conversations we had about them helping us, enabling us, to run this horse and to be successful.”

Recode‘s Peter Kafka asked Cohen about the likeliness of Sony Music and Universal Music following WMG’s lead and reinking their licensing deals with YouTube.

“I’m encouraged by all the conversations that we’ve had,” responded Cohen. “They recognise that YouTube has paid, in 12 months, over a billion dollars in advertising revenue alone. And they see subscription growing faster than any subscription category ever, alongside that.”

Cohen later addressed the music industry’s cynical view of YouTube and said he personally found the company to be on the industry’s side.

“I found that this organisation is filled with music junkies that actually want to be enablers of a new model. And be considered as the friend to artists and labels,” he said. “And we’re going to build really fantastic new tools for the labels. We’re going to surface up their priorities and have their input on what’s important to them. And it’s not just simply going to be run by machines.”

Cohen admitted YouTube hasn’t consulted labels and artists enough to seek out their recommendations, but that “that’s going to start happening.”

He also teased a new project YouTube has been working on with Live Nation in the ticketing and merchandise sphere – “it’s going to be a real healthy experience for all of us,” he said.

This article originally appeared on The Industry Observer, which is now part of The Music Network.


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