For most of the past year, YouTube has been fighting the music industry’s attempts to paint it as a cheapskate, and even a scofflaw, a haven for unfettered copyright infringement.
The company, which has been part of Alphabet’s Google operation for the past decade, has done its best to argue that these criticisms are misplaced and points out that it has paid record labels and musicians billions in licensing fees. But that has done nothing to stem the tide of discontent. So now YouTube has reached out to the dark side for some help in making its case.
The service’s new not-so-secret weapon is Lyor Cohen, the former head of Def Jam Records and Warner Music. Technically, his title is global head of music, but most in the industry believe his job will be peacemaker. As one entertainment insider said, it’s like the prosecutor just joined the defense attorney’s law firm.
But can Cohen persuade the major labels that YouTube doesn’t need to boost the amount it pays for music? If nothing else, he might be able to convince them the streaming service is trying hard to keep copyright infringement to a minimum. But it’s mostly about the money.
The core of the industry’s argument is that YouTube doesn’t pay as much for music as services like Spotify do, and therefore it needs to cough up more cash.
YouTube can afford to pay more, obviously, thanks to its wealthy parent—but it doesn’t think it should. It says its current advertising-based music-licensing system is working just fine. Whether Cohen can somehow help close that yawning gap is the multibillion-dollar question.
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Mathew Ingram is a senior writer at Fortune. Email him. Share this essay.
BITS AND BYTES
Here's the latest global economic data, brought to you by Facebook. The social network is teaming up with the World Bank and the Organization for Economic Cooperation and Development to create a new measure of "business sentiment." The idea is to survey companies that use Facebook pages to interact with their customers. (Wall Street Journal)
Apple signs another corporate sales advocate, Deloitte. The consulting firm is training more than 5,000 consultants on the company's products and services, particularly those related to the iPad. Cook said in 2015 that Apple’s corporate business had reached $25 billion in annual revenue. To drive more, it has struck alliances with IBM, SAP, and Cisco. (Reuters)
Blockchain will be used by 15% of banks by next year. Banks are adopting the technology that underlies the cryptocurrency Bitcoin faster than expected, according to an IBM survey. Financial institutions are using blockchain for consumer lending services, retail payments, and to share real-time information sharing about transactions across business divisions and institutions. (Fortune)
Citigroup plans to challenge Venmo. The bank is joining clearXchange, a real-time money movement network backed by Wells Fargo, J.P. Morgan Chase, Bank of America, and U.S. Bancorp (among others). The group is working on a smartphone app called Zelle that will rival services such as PayPal and Square. (Wall Street Journal)
Walmart may invest in India's biggest e-commerce operation. The retailer is considering a minority stake in Flipkart, a collaboration that would help it compete more effectively against rival Amazon in this market, reports Reuters. In exchange, Flipkart could receive a $750 million to $1 billion infusion. (Reuters)
PEOPLE AND CULTURE
Change of leadership in store for Microsoft's apps strategy. Executive vice president Qi Lu, who previously ran the search business, is stepping back for health reasons, according to several reports. His replacement is said to be Rajesh Jha, currently in charge of Outlook and Office 365. (Recode)
Silicon Valley investor Dave McClure rallies nerds for Clinton. The goal is to raise money from the venture capital, engineering, and founder communities—500 “nerdz,” to be exact. (Fortune)
Meet the executive in charge of PayPal's popular peer-to-peer payments app. Australian-born Jo Lambert heads strategy for Venmo, which lets users send cash to one another. The service processed $4 billion in payments in the most recent quarter, up 140% from the same period a year earlier. (Fortune)
Can this 22-year-old coder out-Bitcoin Bitcoin? Vitalik Buterin is the wunderkind creator of Ethereum, a fast-growing cryptocurrency network. It's based on Ether, the biggest rival to Bitcoin, the $10 billion cryptocurrency that mysteriously burst onto the scene less than a decade ago. (Fortune)
Apple's big London campus takes shape. The tech giant will be the biggest commercial tenant at the Battersea Power Station, a decommissioned power plant near the River Thames in Southwest London that is being turned into 2.8 million square feet of office space. (Fortune)
THE DOWNLOAD
Why deep learning is suddenly changing your life. Speech recognition, machine translation, and other forms of language processing have become far more convincing, with Google, Microsoft, and Facebook unveiling new tricks every month. Then there are the advances in image recognition, with features that let you search or automatically organize collections of photos with no identifying tags.
What most people don’t realize is that all these breakthroughs are, in essence, the same breakthrough. They’ve all been made possible by a family of artificial intelligence (AI) techniques popularly known as deep learning, though most scientists still prefer to call them by their original academic designation: deep neural networks. That dramatic progress has sparked a burst of activity. Read more why the deep-learning revolution helped fuel more than $1 billion of equity funding for AI startups last year alone.
Plus, tech giants Amazon, Facebook, Google, IBM, and Microsoft are launching a nonprofit to “advance public understanding” of artificial intelligence and to formulate “best practices on the challenges and opportunities within the field.” Here are the details.
IN CASE YOU MISSED IT
Yahoo Security Chief Discusses Worst Hack in History, by Jeff John Roberts
How Google Tries to Keep Android Devices Safe, by Jonathan Vanian
Sales Software Upstart Apttus Preps for IPO With Late-Stage Funding,
by Heather Clancy
Virtual Reality Goes Electric for Utility PG&E, by Jonathan Vanian
Twitter Wants You to Create Your Own "Moments", by Tom Huddleston, Jr.
ONE MORE THING
Stop swearing at Siri! A new study suggests that humans can be pretty rude to computer "voice" assistants—participants in 10% to 50% of interactions studied by Missouri State University ended up speaking in a way that would be considered unacceptable if the other party were another person. (Fortune)
This edition of Data Sheet was curated by Heather Clancy.
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