YouTube has announced that it has paid more than $4 billion (£2.8bn) to the music industry in the last 12 months.
Lyor Cohen, the company's global head of music, said that YouTube added a record number of paid subscribers in the first quarter of 2021 and remained confident in its potential to shepherd a "golden age" for the business.
"Many of my friends in the music business have asked why I came to work for YouTube," said Cohen. "Even to this day – after 40 years in the music business – my 90-year-old mother still asks me what I do for a living.
"I came to work for YouTube because I believe in its potential to help shepherd a golden age for the music business. I’m so proud to share that YouTube has paid over $4 billion to the music industry in the last 12 months alone and has added more paid members in Q1 ’21 than in any other quarter since launch.
"I’ve seen this industry evolve from an audio business, to an audio-visual business, and now – as my friend Chuck D puts it – to a visual-audio business. As a visual-audio platform, our goal is to become the leading revenue generator for the music industry and to help artists around the world build a career making music. We are uniquely positioned to achieve this goal because YouTube monetises the end-to-end music experience globally."
I couldn't be more excited about the music industry's future
Lyor Cohen, YouTube
Last year, YouTube’s music subscription service reported that it had over 30 million music and premium paid subscribers, but the company has faced years of complaints about the safe harbour laws that protect the online giant from claims of copyright infringement – a legal status that ultimately results in the so-called ‘value gap’, according to critics.
Katie Oyama, director, government affairs & public policy at YouTube, was grilled by MPs over the subject in a DCMS hearing earlier this year and said the firm had sent out over $12 billion to the music industry so far.
Cohen has long claimed that YouTube’s advertising revenue should be just as important to the music industry as its streaming revenues.
"Through our ad-supported free tier in 180 countries and subscription tiers in 96 countries, we give users the choice to pay with their attention or their wallets," he said today. "YouTube is the world’s largest stage, and advertisers are eager to tap into the deep music engagement that the platform enables. With over two billion users watching music videos monthly, YouTube allows advertisers to reach audiences they can’t find anywhere else. In addition, we added more paid members in Q1 ’21 than in any other quarter in our history.
"Music comes to life in so many ways across YouTube and YouTube Music. Both premium music content and user-generated content (UGC) are growing and driving significant value back to the industry. Whether it’s the premiere of the hottest new music video on your TV, a throwback playing on your Google Home when you ask for music that makes you smile, or the latest viral dance challenge, revenue is generated for artists, songwriters, and rights-holders."
Despite the value gap claims, Cohen said that over 30% of the $4bn generated for artists, songwriters and rights-holders in the last 12 months had come from User-Generated Content (UGC).
"Fan-powered videos have always flourished on YouTube, helping artists grow their audiences and break songs around the world," he said. "We’re thrilled it’s now also become a meaningful and incremental source of revenue alongside premium music content."
Cohen added that the platform was continuing to innovate with direct-to-fan products such as ticketing, merchandise, memberships, paid digital goods, and virtual ticketed events. He pointed out that Blackpink’s paid virtual concert – The Show – sold nearly 280,000 channel memberships across 81 countries, helping the group earn 2.7 million new subscribers to their official artist channel.
"Building the best music experience for fans and empowering all artists to grow their careers are mission-critical for us," he added. "I couldn’t be more excited about the music industry’s future. These days when my mom asks me what I do for a living, I tell her I’m helping to make sure the next Kurt Cobain doesn’t have to become a dentist."
