Meet the new exec YouTube hopes to make the music industry not hate them anymore

YouTube has hired its first "Global Head of Music": Lyor Cohen, a powerhouse music exec who ran Def Jam and Warner Music Group before starting his own label.

Cohen's big job is going to be smoothing relations between YouTube and the music industry, which have been terrible, particularly in 2016.

Over 2016, major labels and other music heavyweights have continually slammed YouTube over the low rates it pays in royalties.

RIAA boss Cary Sherman has been particularly vocal about it. Here's what he wrote in a Medium post in March:

This is the graphic he's talking about:

Here's the basic problem: YouTube wants to be seen as a promotional tool that drives revenue to other forms of music consumption, but label execs are convinced that many people use YouTube as an alternative to services like Spotify and Apple Music, which pay much more. Streaming music has finally became the biggest part of revenue for the industry this year, and YouTube's model isn't what the labels want.

So why don't the labels refuse to sign new deals with YouTube? The answer is complicated, and comes back to the Digital Millennium Copyright Act, which gives YouTube a lot of protection against having to pay if its users post copyrighted material.

Here's Sherman again, on the topic of label negotiations, from an interview with Recode:

So YouTube has the labels between a rock and a hard place, but even so, an openly hostile relationship with labels isn't great for YouTube's business. That's especially true because in the EU, where the government seems to be receptive to the music industry's point of view. The European Commission is planning to reevaluate its own "safe harbor" positions. "Safe Harbor" is the basic concept that gets sites like YouTube off the hook for piracy. Those changes could be horrible for YouTube.

Bottom line: YouTube's bad relationship with labels could end up hurting its business, and that's where Cohen comes in.

Cohen joins a budding tradition of tech companies snagging well-connected music veterans to serve as dealmakers with labels and artists. Apple Music has Jimmy Iovine, the cofounder of Interscope Records, and Spotify has Troy Carter, who managed the likes of Lady Gaga and Meghan Trainor.

Here's a bit about Cohen's background.

Cohen first made noise in the music industry when he became Run-DMC's road manager. While working for Russell Simmons' management company, Cohen continued to expand both his artist list and influence, and is credited with being a force behind Run-DMC's huge Adidas endorsement, according to Complex.

Cohen had a knack for savvy business, and became a major force in the hip-hop world, running Def Jam and then Warner Music Group, one of the major labels.

In 2012, Cohen resigned from Warner, and went to start his own venture called 300 entertainment. The idea behind 300 was to be a new type of record label: a boutique venture that could still swing up and compete with the major labels. It signed artists like Fetty Wap and Young Thug. Google has invested $5 million in 300, according to Recode.

Cohen will continue to run 300 until December 5, according to YouTube. And after Cohen leaves, 300 will continue.

But Cohen's new challenge will be bringing the thinking of music industry titans in line with tech companies. "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," he wrote in a letter to his new team at YouTube.

Here's the full letter:

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