If the currently most powerful man in the music industry sends congratulations, the occasion should be of certain importance.

In the case of YouTube, however, the congratulations from Universal Music boss Lucian Grainge were very special recently: “Our pioneering license agreement with YouTube more than three years ago created the basis for your commitment to the subscription business that led to the launch of YouTube Music. “The approach has more than been confirmed by reaching the milestone of more than 50 million subscriptions.

Benjamin Fischer

Editor in business.

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Lyor Cohen can only remember the disputes with the music industry about the remuneration from video consumption and the protection of various music rights on YouTube.

When asked about the special kind of congratulations, Google's music director laughs briefly and then reacts just as calmly as self-confidently: “We are very happy to be working in partnership with Lucian and everyone else in the music industry today.

There was a time when we were the most feared player of all and now the industry sees us as the greatest bearer of hope. "

$ 19.7 billion just from advertising

Until he switched to Google in the summer of 2016, Cohen was in a sense on the other side. The 61-year-old New Yorker once ran Def Jam - today one of the core labels of Universal Music with a focus on hip-hop - later he rose to Warner Music's global responsibility for the entire label business, before not leaving in 2012 most recently founded the music company 300 Entertainment with Google as an investor. “For a long time it was just about signing a new license agreement on a regular basis and that was it,” says Cohen. "At YouTube we now have a real understanding of how we can add value to the music industry and make things easier for them."

The basic version of the YouTube streaming service costs 9.99 euros, as is the case with Spotify or Apple Music. For two euros more, the individual user receives, among other things, ad-free access to all videos on the platform. The more than 50 million subscribers reported at the beginning of September related to both models. The number was not broken down more precisely, but it did include free trial subscriptions. Very soon, however, there will also be more than 50 million paying YouTube Music and YouTube Premium subscribers, stresses Cohen. It was only at the beginning of June that he declared that YouTube was currently the fastest growing provider in terms of subscriptions.

As the fourth western service after Spotify, Apple and Amazon Music to have cracked the 50 million mark, should only be an intermediate step: By 2025, YouTube should be the largest single source of income for the music industry.

On the way there, the Google subsidiary doesn’t save with further water level reports that are impressive at first glance.

Dispute over share of the cake

More than four billion dollars have been paid out to the music industry in the past 12 months, it was said at the beginning of June. Around 30 percent of this was generated through videos created by users and not the actual rights holders. How much came from the subscription business on the one hand and the advertising income from the video platform on the other, remained open. For comparison: Spotify, the largest streaming service on the market as of the end of June with 165 million subscribers and 365 monthly active users, had paid out more than five billion dollars to the various rights holders in 2020. Nevertheless, YouTube earned 19.7 billion dollars from advertising alone in 2020 - and the trend is rising: only in the second quarter of 2021 it was around 7 billion dollars.Spotify, on the other hand, as a pure audio service only generated total sales of 7.9 billion euros last year, a good 90 percent of which came from subscription income. In terms of user numbers, Youtube is by far the largest service for music consumption.

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