In a notable rapid growth spurt, YouTube Music and Premium services now have more than 80 million paying subscribers, a reps reports. diverse A massive increase of 30 million from the 50 million the company announced in September of last year.
It’s a dramatic leap, especially for a platform where a lot can be gotten for free, and it seems to put YouTube – already the number one comprehensive music streaming platform worldwide – in third or fourth place in the world. Pay Music streaming service, behind only Spotify, Apple Music, and Tencent for China, though those ratings are always stacked with asterisks (like whether or not free trials are on the history; YouTube includes them, which not all services) .
However, the growth is remarkable by all accounts and comes hand in hand with a charming years-long campaign targeting creators and the music industry.
After a few false starts, YouTube Music and Premium launched their subscription services in earnest in 2018, about 18 months after head of music Lior Cohen joined the company, after many years in C positions at Def Jam Records and Warner Music, such as Plus 300 Entertainment (which he co-founded and sold to Warner for $400 million last year). The move came after years of contentious relations between YouTube and the music industry over relatively low royalty rates, a situation that has not been diminished by Cohen’s sometimes known combative behavior.
But since then, YouTube has worked hard to be a “partner” in the music business. The company now says it has paid out more than $50 billion to creators, artists and media companies over the past three years; This total includes more than $6 billion for the music industry between July 2021 and June 2022. It has also boosted its “dual-engine” revenue model (ads and subscriptions) amid a dizzying array of other features to help creators and production companies promote music – including YouTube Shorts, essentially Its response to TikTok, which the company says now averages 30 Billion daily views.
However, $6 billion in 12 months speaks very loudly. Top sources in music companies say diverse that things have improved significantly, although they feel there is a large gap in the value of the royalties; “It’s a big change from what we were ten years ago,” Lucian Grainge, chairman of Universal, the world’s largest music company, said at the Music Matters conference in September. As former YouTube chief business officer Robert Kinkel – who became Warner Music CEO on January 1 – said – Bloomberg Last year, “We make money, they make money. We made it, they worked. The alignment is perfect.”
Fair enough, but the money and flashy features don’t seem to be responsible for a drastic change of 30 million subscribers. It may actually be the cumulative effect of what Cohen says was a long-term strategy to improve the platform (and thus address many of the things people find annoying about the free YouTube service) while interacting with the people who would like to do so. He competed against him fiercely during his naming days.
“I think there was a lot of misunderstanding on both sides,” Cohen says. “So I slowly went to work, switching between engineers and the music industry so they could hear each other.
“We didn’t have a team either [interfaced] With the labels,” he continues. “When I came here, we were just a negotiating job that showed up every three years to collect a signature, rather than working alongside the industry to understand what was important to them. So we’ve gone from being just a transaction to a partner who appears in the ways a partner appears. We also went to work explaining the movers’ growth story around advertising and subscription; Many record companies have built a lot of power around subscription but not advertising.”
But the short answer to optimization is ” [paid] Sign up works,” he concludes. “Since we didn’t have one, since we didn’t make the funnel, they thought we weren’t great partners. And I think building a successful subscription business is one of the ways the industry is starting to feel good about us.” (The descriptor of the ad-supported YouTube option, aka “free” also clarified: “I always support calling it “free” — it’s not free” , he insists. “They push with their eyeballs.”)
Improving the user experience was a key factor in this effort as well. Along with Shorts, product manager Adam Smith announced a series of subscription plans and features the platform has developed to engage fans, including a wide range of music content not available on other services — which can range from concerts and TV appearances to radio sessions — Along with premieres and exclusive content such as ‘after parties’ (where the artist holds an online event for a song or video). There are also features like “Meet” (where fans can watch videos together), “Foundry”, “Artists on the Rise” (artist development programs for independent musicians), channel subscription regulation, and a host of other features.
“We’ve been building YouTube Music and Premium for the past seven years, and it’s built around this core set of features – being ad-free, the ability to play videos or audio when you’re elsewhere in the app or mobile, and the ability to Access it, for example, if you get on a plane and forget to download the videos or audio you want. The goal is to let people use YouTube with them wherever they are, and we have a full team of music industry experts, product managers, and engineers building what we believe is the best-in-class music experience.” .
He and Cohen also refer to the annual multi-channel YouTube live broadcast of the Coachella Festival — which offers viewers literally the best seat in the house for free — and events such as the early pandemic livestream of opera singer Andrea Bocelli’s concert at the Duomo in Milan, which Cohen calls “one of the greatest moments of my life.” “.
Another element of the YouTube magic attack is aimed, in one way or another, at fans and artists, who are on opposite sides of the same problem: For fans, when you can listen to almost anything on earth, what do you listen to? How can artists showcase their music in the unimaginably vast sea of choices?
Cohen, who began his career in the 1980s at Def Jam’s sister company Rush Management, and works with Run-DMC, Beastie Boys, LL Cool J, and many others, brings the artist’s perspective into the equation. With the advent of social media, artists have found themselves burdened with another full-time job: working to advance their careers and interacting with fans rather than making music.
“The fine prints of an artist these days, which they have not subscribed to, are [generating] Likes, clicks, subscribers, all those taxing things they need to do to find their fans.” “I think it’s a real struggle for a lot of them, and it’s a struggle for the labels. This is another thing we want to try to simplify and solve. I would like artists to be able to focus on writing songs and developing their craft, and to a lesser extent always being there.”
For fans, he says, “I think one of the biggest challenges is the abundance of choice.” “And that’s why I’m so excited about shorts. In many ways, shorts look like I’m looking at a cage [of vinyl] And pulling records, wondering what’s next – it’s an addiction. And what I want to do is entice the fans — or the consumer, I would say — into our main YouTube area where they can watch a premium music video or interview, performance or whatever starts to create a deeper connection with fans.”
It is certainly in the music companies’ interest to see increased competition in the digital space, particularly broadcasting, which in just a decade has become the dominant global source of music consumption. After years of almost loyalty to Apple’s iTunes, and more recently to beleaguered market leader Spotify, the rapid rise of YouTube and Amazon Music is quickly leveling the playing field — and also signaling an effort to counter what many in the music field see as the next major threat, from TikTok, which is preparing to launch its own streaming service and is the latest platform for many companies to mesh with the industry over royalties.
And while there will always be an element of skepticism when dealing with one of the richest and most powerful companies in the world — in this case, YouTube and Alphabet, Google’s parent company — at least, Cohen says what the music industry wants to hear. He concludes, “Our goal is to be the number one source of revenue in the music industry.”
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