When you work in the music business, there are three rules you have to understand, according to legendary music manager Irving Azoff.
First, “None of us exists except on the talents of others.”
Second, “Getting even isn’t good enough.”
“Pay now or pay more later.”
The Chairman and CEO of Azoff MSG Entertainment is leveraging all three against YouTube, who he is taking on in a very public battle to get the Google-owned video site to compensate artists and grant them more control over how their music appears online. Azoff spoke publicly about the YouTube battle with The Wrap’s editor Sharon Waxman during last week’s The Grill at the Montage Hotel in Beverly Hills. Just two days before YouTube hired 300 Entertainment founder Lyor Cohen to serve as its Global Head of Music, Azoff took the stage at the film and TV industry event to talk about his ongoing fight with YouTube.
“It’s not just that they don’t pay enough. It’s also the control factor,” he told Waxman during the 45-minute Q&A. “Imagine calling up HBO and saying, ‘Game of Thrones premieres tonight. Can you put that up on Youtube, so everybody’s watching it for free also.’ What would that do to the subscription rates of HBO?”
He mocked Google for telling its employee “don’t be evil” when it allows music to appear on the site and monetizes copyrighted material with ads.
“This is evil. It’s really evil,” he said. “We’re at a time, especially in music, when there’s such a lack of respect for intellectual property, and they’re the worst defender of it,” later adding, “At the time when music has never been more popular, it’s less money for us.”
He accused Youtube of “playing whack-a-mole” with its takedown system for copyright material and said artists like Bruno Mars and Don Henley don’t want fans uploading low-quality phone video from concerts to the site. About one-third of Christina Aguilera’s music is streamed on YouTube, but the site makes up less than 10% of her revenue.
“About 80% of YouTube users use it for music and 81% of them listen to music they already know,” he said. “What does that tell me? It tells me that YouTube has become a substitute for Apple or Spotify. It’s free, on-demand streaming for consumers. Why would they pay, if they can go get it for free?”
Monetizing music or putting it behind a paywall would hurt YouTube traffic, he argued, adding that “Google wants unlicensed music on YouTube because it drives searches through Google and sells advertising on Google.”
He also brought up the practice of stream-ripping, where listeners download content from YouTube into MP3 files to later replay on their phones or computers.
“This is piracy. They’re pirates,” he said. “The fact that they can’t have a choice to put it behind a pay wall seems irrational, illogical and not fair.”
Waxman pointed out that Youtube pays hundreds of millions to labels for the right to license music.
“In the past, they’ve been able to push the artist against the record companies,” Azoff said. “The great thing that’s coming out of this is that for the first time, probably because the economics and business have been so hurt, you’ve got a united music industry. The record companies, publishers, artists, standing together. Streaming is the future. Paid streaming will make everything healthy. Not just economically. It will allow people to make a living rather than starve at it.”
How many paid streaming accounts will it take to return the music industry to sustainability?
“For the industry to really get healthy, we need 200 million streaming worldwide paid subscribers. You’re not getting there if it stays free,” he said.