To be entirely fair, “frustrate and seduce,†the phrase recently used by Lyor Cohen to describe his plans to turn YouTube into a music juggernaut, certainly speaks to the human condition at the moment. The system we live in relies on the constant stimulation of desire, and one of the corollaries of an all-advertising-all-the-time culture is a near constant state of thwarted desire. And Cohen, the veteran record executive who has run two major labels and one of his own creation, knows a thing or two about the business of music; YouTube wouldn’t have hired him in 2016 to head up their global music division for any other reason. When he talks to Bloomberg Tech about his plans to barrage people who use YouTube to listen to music with so many ads until they cave in and pay to subscribe to the site’s new music service, people listen.
So while “frustrate and seduce†may seem like a dubious strategy to improve YouTube’s bottom line from the outside, who really knows? Using the mythic algorithms of YouTube’s parent conglomerate, Google, to target potential subscribers, Cohen might just pull in enough new revenue to get the last laugh.
But sometimes what seems like a dubious strategy actually is a dubious strategy. Ads can suck, and more ads can suck even more. The demographic that uses YouTube to watch lots of music and has enough disposable income to consider subscribing to a paid music service seems likelier to tune out than to tune in in response to a spam surge; if anything, they’d tune in more to the music services they already pay for. The record industry may be looking to Cohen to offer them an alternative to Spotify, Apple Music, and Tidal, but popular interest may well be lacking. For all its absurd, monopoly-tier profits in targeted advertising, the Google family has a mixed record when it comes to breaking into other tech sectors: Google Plus is a dead letter next to Facebook; Google’s Pixel smartphones are floundering in competition with phones from Apple and Samsung; and YouTube Red is still finding its feet next to Netflix and Hulu. Having reached the natural limits of their original growth, the titans of the tech industry (with the possible exception of Amazon) have few options left for further expansion beyond invading each other’s home turf and levying heavier taxes on one’s user base — in other words, more ads or more paid subscriptions.
It’s not hard to see why YouTube seems to be in a rush to grab a corner of the music business. Newly published figures from the RIAA show an industry in revival: At $8.7 billion, revenues have reached their highest point since a decade ago, and nearly half of it comes from paid subscription revenue from the likes of Spotify and Apple Music. Meanwhile, a Wall Street Journal report shows that Apple is on the verge of overtaking Spotify in paid subscribers in America. With Apple poised to take a commanding lead in a burgeoning market, time is tight. If Google doesn’t grab a slice of it now, it likely never will. If they’re turning the screws on their users, one major reason is because they themselves feel the walls closing in — short of buying Spotify outright, that is.
Cohen’s proposal is striking because it marks the point where the ethics of “disruption†of established industries collides with the fact that tech has become an established industry. Tech seduced the world, literally, with ease. Suddenly you could network, or research, or watch porn, or buy books, or hear music, with less friction and hassle than ever before. Yet at this point, the only thing now left for big tech to profitably disrupt is the satisfaction of its users. Frustration isn’t just an inevitable consequence of market economics; it’s intrinsic to life itself. But it takes a special kind of market logic to imagine that frustration will make people happier. “They will appreciate in time the advertising,†Cohen says at the end of the Bloomberg piece. “Everyone is drunk on the growth of subscription.†It’s a telling metaphor: What could possibly be more conducive to smart decision-making than being drunk?