Last spring, Lyor Cohen was in Mumbai, India, when, as he recalls it, his mind was “splattered all over the ground.” The 60-year-old was there for the India launch of his company’s subscription product, YouTube Music Premium, and acts hailing from across the subcontinent were in attendance, with some traveling thousands of miles to perform. “The artist and label community came out in such a loving way,” says Cohen, perched at the edge of an armchair in YouTube’s Chelsea Market offices in Manhattan. “They’re going through a transitional moment, with the benefit of exploding connectivity. I pay a lot of tolls being here, but I get so much joy and pleasure by experiencing things like this.”
A little over two years ago, Cohen joined YouTube as global head of music, with the difficult job of turning around its relationship with a music industry that saw the video giant as building a business off its content. The service’s ad-supported tier pays a fraction of what subscription services pay, and rights holders had been pushing European legislation that would close what they dubbed “the value gap.” YouTube, which tells Billboard it paid $3 billion to the music business in 2019, had cast the labels as anti-innovation and the legislation as potentially ruinous to the open internet. Even as the two sides renewed licensing deals, animosity only seemed to grow in what came to resemble a Cold War-type standoff.
The origin of the hostility lies in the “safe harbor” — embedded in the Digital Millennium Copyright Act in the United States — that protects YouTube from legal liability for infringing content that users upload as long as it responds promptly to a takedown notice. That means rights holders have essentially faced a choice between licensing their content or having it appear on the service anyhow and depending on YouTube’s Content ID program to flag what’s unauthorized and sending takedown notices about the rest. As a result, YouTube has always had more leverage in negotiations than services like Spotify and Apple Music — to the point that some rights holders felt the company made them offers they couldn’t refuse. “There’s no getting around the fact that even if YouTube doesn’t have licenses, our music will still be available but not monetized at all,” wrote Warner Music Group (WMG) CEO Stephen Cooper in a spring 2017 internal memo leaked to the media.