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YouTube plans to launch paid music streaming service

by Mark Tyson on 18 June 2014, 13:15

Tags: YouTube (NASDAQ:GOOG), Google (NASDAQ:GOOG)

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We may see big changes in which artists appear on YouTube in the near future. The Google-owned video sharing site has announced that it will be blocking content from indie labels if they don't sign up to the licensing terms for the company's new paid music streaming service, reports Reuters.

YouTube confirmed on Tuesday that it is launching a subscription based music service as it has partnered with "hundreds of major and independent" music labels for this purpose. However several indie labels are currently fighting back against YouTube's push for the service signup. They accuse YouTube of strong-arming them into signing up to its "highly unfavourable, and non-negotiable terms,". With no negotiations, the Google-owned company said that it will start blocking videos "in a matter of days," to make sure all content on the new platform is regulated by the new terms.

"We’re adding subscription-based features for music on YouTube with this in mind - to bring our music partners new revenue streams in addition to the hundreds of millions of dollars YouTube already generates for them each year," YouTube said in a statement.

The Reuters report said that 95 per cent of affected music labels have already signed to deals for the paid service, and that YouTube is blocking content from the remainder in order to provide a consistent user experience for its paid service.

"While we wish that we had a 100 per cent success rate, we understand that is not likely an achievable goal and therefore it is our responsibility to our users and the industry to launch the enhanced music experience," Robert Kyncl, YouTube's head of content and business operations, told the Financial Times. To strike deals with record labels, other media companies often struggle to come to an agreement over payments. However, Kyncl claims that YouTube is offering all rights holders a good deal. "We’re paying them fairly and consistently with the industry," he explained.

YouTube is joining of the fast-growing market for paid music streaming means that we will see another strong player enter the music streaming battleground. Other tech giants such as Amazon, which has recently launched Prime Music, and Apple, which recently acquired Beats Music, have entered the fray, whilst services like Spotify and Pandora are still increasing in popularity.

How the YouTube paid music service works

The paid service is set to launch towards the end of the summer and will allow subscribers to pay a monthly fee to listen to music or watch such videos on their devices - without adverts. Other features include letting users listen to music offline and the ability to listen to entire albums instead of just individual songs.

The upcoming YouTube paid streaming service is said to work alongside Google's $9.99pm 'Play All Access' music subscription to avoid forcing customers to subscribe to two separate similar services.

HEXUS Forums :: 15 Comments

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The Reuters report said that 95 per cent of affected music labels have already signed to deals for the paid service, and that YouTube is blocking content from the remainder in order to provide a consistent user experience for its paid service.
If it was me, rather than blocking the content of the folks who were holding out, I'd just make sure that their videos were hit with a lot of ads - especially for content from those labels who HAD signed up.

Find these kind of strongarm tactics, (see also Amazon and Hatchett press), quite distasteful. Only saving grace is that my music tastes are so strange that it's unlikely that YouTube music is going to be of use to me, so I'm definitely not going to be subscribing.

Much prefer to buy a CD anyway. :p
I don't follow any of the modern music either, so is unlikely to affect me.

But I do wonder if they'll end up with it having a subscription only service for all their content? I mainly use youtube for gaming content, and my kids for nursery rhymes. But don't think I'll be using it if I gotta pay to watch content. I've noticed some youtubers using Pateron to get additional money to supplement their costs, which is voluntary. If it is forced, IMHO, people will just go elsewhere for their content.

Edit: Also, this does sound a bit like what Amazon music is doing, allowing offline play etc.
Can't say I follow mainstream music anymore but I have found some good groups on youtube from doing random ‘hunts’….

Not exactly sure what they're ‘planning’ with this new service but my youtube has been adfree for years lol
So you pay money to get rid of ads on YouTube? But only for music videos? That sounds pretty weird to me. YouTube blocking people who don't agree just sounds controlling and makes me wish there was another streaming site that people would switch to.
It all sounds wrong to me. I imagine very few EDM channels I listen to, to find out if I like a song, or just to hear new releases have signed in with this. If that's the case, many of these EDM artists will likely lose my money. There's too many non-mainstream and newcomers to keep track of by following worthless Facebook pages and such.

Although the latter gives me an idea. All the promotion channels have Facebook, etc. So they'll post videos as usual through other hosting services.