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March 19, 2013

YouTube to Launch a Subscription-Based Music Service

YouTube is supposedly all set to come out with their own subscription based music service sometime this year to rival the current hot favorite, Spotify. It is also believed that it will be soon seen in Google Play, the Android music platform. In that case, it will soon become a full fledged media juggernaut. IT is rumored that YouTube has their own operating unit and negotiating team.

Whereas Google Play serves as a digital locker allowing users to purchase, save and filter their audio tracks. This new service will let anyone listen to music for free. And obviously, an ad- free paid service will also be made available to users.

According to Google spokespersons, content creators at the company are of the opinion that there would be huge benefits from subscription revenue streams so they were ‘looking into’ the matter but did not confirm if a music streaming service would be launched. If such a service is launched, it will surely sweep aside Spotify from its current no.2 position in the industry, seeing that YouTube already has such a vast audience. Muve Music from carrier Cricket is no.1; if YouTube’s paid services come cheaper than the monthly $5 charged by Muve, they could well become the no.1 very soon. Of course, this market is choc-a-bloc already with players like Rdio, Pandora and so on in addition to Spotify and Muve Music.

We are all aware that YouTube is one of the most popular services for video and music; there have been no subscription fees charged till now. Though spending on subscribing to music streaming is far lesser than the spending on actual purchasing, many music labels are entering the music streaming fray.

IT is believed that Warner Music Group earned 25% of its digital revenue from music streaming services. Record companies are still debating as to the amount of content to be given away free, with the fear that free listening may become the norm, and the only revenue coming in would be from ads. There is no agreement whether a subscription based service or an ad subsidized service would be more lucrative. While free services bring in many more listeners, subscribed services bring in actively paying listeners.

YouTube has tremendous reach, with an audience of millions spanning several countries across the globe. Most of the videos that are viewed happen to be music videos, with the average age of the audience being well below 25. In fact a study says that 64% of teens chose YouTube as their preferred platform for listening to music. This is definitely a golden opportunity for music companies to further expand their revenue sources, and they are not likely to let that ship sail.

Billboard started to incorporate YouTube views into their metrics for deciding the top songs of the week, and Baauer’s Harlem Shake shot to the top spot, thanks to its video that went viral on YouTube. YouTube has already started to embed links that will enable users to buy songs uploaded by other members. The links take you to Google Play. Therefore it’s quite possible that a user’s collection of tracks will be synced across the two services (for PCs and Android devices), even allowing recommendations on one service based on the purchase history on the other.

This is not YouTube’s first foray into the music industry. They had partnered with record company Vevo earlier. A feature called Content ID enables songs to be tagged with an audio fingerprint. This helps artists get royalties in a more reliable manner. Artists get a better deal from this service than from any other service, especially Spotify.

Well, if YouTube is indeed launching a music streaming service, we will know soon enough. Until then, speculate away!

Andrea Walters, a freelance writer for – The Nation’s Lowest All-Digital Price Provider.