“Lyor is a lion of the music industry," said YouTube's Chief Business Officer Robert Kyncl in a statement. "From Rush to Def Jam to Island Def Jam to WMG then 300, he has consistently been a pioneer, charting the course for where music is heading. As we enter the growth era of the music industry, Lyor is in a position to make tremendous difference in accelerating that growth in a fair way for everyone. We are thrilled to welcome him to YouTube."
One source tells Billboard that while Cohen will be eventually stepping down as 300's CEO, he will remain its largest individual investor. At the launch of the company in 2013, Google confirmed it had led an investment round that contributed $5 million to the nascent startup; YouTube, of course, is owned by Google.
Cohen has his work cut out for him at YouTube, particularly in repairing the company's relationship with the music business. For the past year Kyncl has, effectively, been serving as the video streaming giant's interim head of music -- which has been a rough one for the company's relationship with the music industry. Beginning in April of this year, music stakeholders began pressuring YouTube over what they dubbed "the value gap" -- that YouTube, despite being one of the most common digital destinations for music listening, was not paying rates on par with services like Spotify or Apple Music.
This pushback came in the wake of the company's introduction of its YouTube Red subscription tier, and the YouTube Music app.
In addition to the unrelenting pressure placed on it by the music industry, it also faces an uphill battle in Brussels. The European Commission recently announced plans to overhaul the concept of "safe harbor," a legal provision designed to protect user-generated sites like YouTube from being liable for copyrighted material that is uploaded to their platforms.
In an interview in August, Cohen spoke about his early relationship with YouTube while he was head of Warner Music Group, claiming he tried at the time to get the video platform to create a paid premium sector. "We were the first signers of the YouTube deal," he said. "Our issue was that our premium content sat alongside user-generated content and thus the advertisers felt very uncomfortable because at any given time something user-generated could be popping up. The reason why we were trying to push them to create a well-lit and clean environment for premium content was so that advertisers felt comfortable they were going to be able to advertise and actually touch their consumers without being sideswiped by something profane or wild in the user-generated side."
In the same interview, he expounded on his positive view of Spotify's arrival in the United States, explaining that the company's insistence on maintaining its free tier was borne from the success of YouTube's model. "The problem now is the relationship not of piracy to free but YouTube to the free tier," he said. "That is where Spotify and Apple are complaining all the time that they have to have a very broad and wide free tier in order to compete because of YouTube."
With this appointment, YouTube becomes the latest streamer to bring in a music executive with decades of experience dealing with artists. Apple Music launched with Jimmy Iovine leading the charge, who had previously run Interscope for 25 years; Spotify recently brought on Troy Carter as global head of creator services, who had managed Lady Gaga and Charlie Puth through his Atom Factory company; and Jay Z is, of course, the public face of Tidal's ownership structure.
Cohen penned a letter about his appointment and plans for his new position, which he says will focus on bridging the gap between technology and music. Read the full letter, which was sent to the YouTube music team, below, as well as a letter Cohen sent to his staff at 300.
From: Lyor Cohen
To: YouTube Music Team
It’s an incredible time to be in the music business. Back in 2006, as an executive at Warner Music Group, I worked closely with a fledgling video site to sign its first big record licensing deal. That site was YouTube. Over the next decade, I watched as your work transformed YouTube into an incredibly powerful platform that connects artists with fans all over the world.
Throughout my career in the music industry, I have strived to stay on the forefront of new technologies and cultural movements. And since starting in the industry over thirty years ago, I’ve always sought to be an advocate for artists and do everything possible to shine a light on the great talent I’ve been lucky enough to work with, including Jay Z, Run-DMC, DMX, Public Enemy, Kanye West, The Killers, Bruno Mars, Ed Sheeran, Young Thug, Fetty Wap, and Highly Suspect among others. Bringing attention to the often overlooked, but talented communities has been a huge part of my life’s work and I’ve seen how music can truly bring people together.
Over the last two decades we have seen dramatic shifts, both to the inherent value of music and the literal value that people are willing to pay. Technology and new business models have completely changed the established distribution channels that have long-served the recorded music industry. And while change has been met with understandable resistance, I strongly believe that this transformation provides opportunities that will be larger and more rewarding for both artists and the music industry.
That’s why I am excited to join this incredible team as Global Head of Music. I look forward to working together with all of you on three things. First, helping the music community embrace the technological shifts we’re seeing in music today so we can help take the confusion and distrust out of the equation. Second, building on the great work you all have done to help the music industry and creative community break new songs and artists to YouTube’s audience of over 1 billion fans. From building on the success of the YouTube Music app, to shining a light on emerging artists, I believe our potential to strengthen the industry is massive. And third, I hope that together we can move towards a more collaborative relationship between the music industry and the technologies that are shaping the future of the business.
I’m confident that we can bridge the worlds of technology and music in ways that benefit everyone, instead of the zero-sum mentality that exists today. I’m proud to be a music man, and hope that the perspective I bring from both the creative community and the music business at large will help us, our music partners and artists grow and thrive together.
Update (4:41 p.m.): Below is Cohen's letter to his staff at 300.
Looking back on the last three years of amazing work and effort put forth by everyone in this building, it is obvious to me that 300 has made massive steps forward in identifying and proving the efficacy of the boutique label concept. I believe that there is a lot of misunderstanding and lack of knowledge between the creative community and new distribution and I intend to contribute my resources in helping to solve this riddle. This desire to contribute to the greater health of this business, while also bringing my experience and reputation as an artist advocate, has helped reassure me in accepting the job as Global Head of Music for YouTube.
300 has consistently put ourselves in the position to build lasting and meaningful relationships with the amazing artists we work with. Through 300’s successes, I hope we have helped light the way for others to follow in this model of creating a creative hub that is both a great partner to artists and determined to succeed. 300 is and will always be dear to me, and I hope that our company continues to show the success that comes from a dedicated, close-knit, and hardworking group of people.
I will be here the next 60 days to lead this transition. So it is imperative, that you all continue to be excellent and strive to be 300, not 176. Be a collaborative and thoughtful creative company that has a deep and trustworthy relationship with its artists, and don’t forget, as long as you’re busy being born, you won’t be busy dying.
With great respect, love, and admiration,