By the end of the year, YouTube, a division of Google, is expected to announce a paid subscription service to compete with Spotify and other streaming outlets.
The subscriptions will be offered at about $10 per month and would be tailored to mobile services. Customers would be able to watch videos or listen to music without interruptions from advertisers.
Young people love YouTube. The deal would give record companies a bigger share of royalties on YouTube, which has become the main listening platform for young people worldwide. While YouTube has declined to comment directly on the news, it has been reported by Billboard.
Once launched, the service would solve problems for YouTube and the music industry. Mobile access to the site has skyrocketed. Google has announced that 40 percent of traffic comes from mobile sites, compared to six percent just two years ago. Lower advertising rates on tablets and smartphones have meant that some music labels have blocked their content from these types of devices.
A win-win for YouTube. By signing the deal, YouTube will get the licenses it needs to cover official artists’ videos as well as user-generated content. Along with higher payouts, the service will also be able to offer music in full albums and playlists. YouTube has already signed licensing deals with Sony, Universal and Warner, as well as some independent labels.
This provider is the latest arrival in an already-crowded market. Along with Spotify, Rhapsody, and Rdio, streaming subscription services that are already being offered by Sony and Google through the Google Play Music All Access service. This service, which was introduced in May, was developed and operated separately from YouTube, and costs $10 per month.
The Beats Music subscription service will also be hitting the market soon. It will be a service offered by the makers of Beats by Dr. Dre headphones, and music executives have high hopes for the enterprise. They hope it will bring $300 million in music subscriptions.