YouTube Music Hits 125M Subscribers — Lyor Cohen Reveals YouTube's Bold Plan to Challenge Spotify's Dominance (and explains AI's role in music videos)

In a digital landscape where music streaming platforms are battling for supremacy, YouTube has emerged as a formidable contender with remarkable growth statistics. The platform recently announced reaching 125 million paid YouTube Music and Premium subscribers worldwide—an impressive addition of 25 million subscribers in just one year. This milestone not only showcases YouTube’s accelerating growth trajectory but positions it as a serious challenger to Spotify’s dominance in the music streaming industry.

Lyor Cohen, YouTube’s Global Head of Music, shared his insights on this achievement and his vision for YouTube’s future in the music ecosystem in an interview with Music Business Worldwide. With his characteristic determination, Cohen is steering YouTube toward becoming the number one revenue contributor to the music industry globally—a title currently held by Spotify, which paid out $10 billion to the music industry in 2024.

The Twin-Engine Growth Strategy

At the heart of YouTube’s success is what Cohen refers to as the “twin-engine growth story”—the dual revenue streams of subscriptions and advertising. “The twin-engine growth story is a real thing. And the bigger the engines, the better it is,” Cohen explains.

This approach has proven effective, with YouTube’s ad revenues reaching an unprecedented $10.47 billion in Q4 alone, marking the first time the platform’s ad revenue surpassed the $10 billion mark in a single quarter.

While Alphabet/Google doesn’t disclose how much of that ad revenue is driven specifically by music, YouTube confirmed in 2021 that music accounted for 25% of watch time on the platform globally.

The last publicly shared figure indicated that YouTube paid music rightsholders over $6 billion in the 12 months to the end of June 2022—a significant increase from previous years and likely much higher now given the platform’s continued growth.

Cohen emphasizes that this growth directly benefits the music industry: “All this means is more money for artists and songwriters, artist development, and A&R signings.”

The Tortoise and the Hare

When asked about his timeline for YouTube becoming the top revenue contributor to the music industry, Cohen acknowledges that his earlier prediction of 2025 won’t materialize. However, he remains undeterred, likening YouTube’s approach to the fable of the tortoise and the hare: “We have a long vision. We’re committed to building products that the fans really care for and where fans are, that’s where you’ll find the music industry and the artists.”

This patient, methodical approach has been central to YouTube’s strategy. Rather than aggressively targeting users of competing platforms, Cohen reveals that YouTube has focused on attracting new subscribers to the ecosystem. “We wanted to build a world-class platform. We wanted to take our time, listen to the industry, listen to the fans, course correct, and iterate,” he explains.

Building a Global Music Subscription Business

Cohen doesn’t underestimate the challenge of creating a successful music streaming platform. “Building a global music subscription business is not for the faint-hearted. It takes real commitment,” he states. He credits YouTube’s success to its exceptional team of engineers, UX designers, product managers, and marketing professionals.

This insight comes at a time when other tech giants have struggled in the music streaming space. TikTok recently shuttered its music service in several countries, highlighting the competitive nature of the industry. Cohen’s message is clear: “You can’t half-ass building a global subscription business. It takes a lot of effort and a lot of capital, and of course, you have to recruit the most talented people on the planet.”

The Future of Music Videos and AI

Perhaps most intriguing is Cohen’s perspective on the evolution of music videos and the role of artificial intelligence in their creation. As the living room becomes the fastest-growing screen for YouTube consumption, Cohen sees tremendous opportunity in visual storytelling.

“We’re not interested in just breaking songs. We want to break artists, and video storytelling is one critical foundation block,” Cohen explains. He acknowledges that music videos have traditionally been the most costly line item for the music industry and suggests that AI could revolutionize this aspect: “If there is a way through AI that we could help reduce the cost of visual storytelling and improve the quality, I think it would be a real gift that we could give our partners and artists and fans.”

YouTube is already implementing AI tools like Veo 2, which allows creators to prompt and create cinematic content.

Cohen believes that YouTube’s collaboration with Google and DeepMind provides a significant competitive advantage, but emphasizes the importance of using AI “thoughtfully, responsibly, and boldly.”

Balancing Short-Form and Premium Content

YouTube

In an era where short-form video content is increasingly popular, Cohen recognizes the need to balance platforms like YouTube Shorts with premium music videos. He envisions a “more nutritious user experience” where users might discover new artists through Shorts but then engage more deeply with long-form content.

“I’m not a big fan of scrolling in isolation. It’s a way to discover, but the nourishment is your ability to discover something but also to go deep,” Cohen explains. This philosophy reflects YouTube’s unique position as a platform that can offer both discovery through short-form content and deeper engagement through premium music videos and other long-form content.

Looking Ahead

As YouTube continues to grow its subscriber base and ad revenue, Cohen remains focused on the platform’s long-term vision of becoming the music industry’s most valuable partner. With its twin-engine approach, commitment to innovation, and strategic use of AI, YouTube is positioning itself not just as a music streaming service but as an essential platform for artist development and fan engagement.

In the race to become the music industry’s top revenue contributor, YouTube may be taking the tortoise’s approach—steady, methodical, and persistent. But as the fable teaches us, sometimes that’s exactly what it takes to win.

The Challenge of Unauthorized AI Music

While YouTube is embracing AI technology to enhance music creation and distribution, the industry as a whole faces significant challenges with unauthorized AI-generated content. As Sony Music battles against 75,000 AI music deepfakes featuring artists like Harry Styles and Beyoncé, platforms like YouTube must balance innovation with protection of artists’ rights.

Cohen’s emphasis on using AI “thoughtfully, responsibly, and boldly” reflects this awareness. YouTube’s approach to AI development aligns with growing industry concerns about voice cloning and unauthorized reproductions, as seen in cases like Celine Dion’s fight against AI-generated fake songs that have garnered millions of views online.

By working closely with music industry partners and establishing clear ethical guidelines for AI implementation, YouTube aims to harness the creative potential of these technologies while respecting artists’ intellectual property and creative control.

Want to learn more about how AI is transforming the music industry? Check out my comprehensive guides on AI music videos, voice cloning technology, and music promotion strategies for the digital age.

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