Finally, YouTube rolls
out Music Key
paid subscription service
paid subscription service
Image: Reuters
Google is remixing the
music on its YouTube video site with the addition of ad-free subscription
service “Music Key” and a new format designed to make it easier to find
millions of songs that can still be played for free.
The subscription
service is part of Google’s effort to mine more revenue from YouTube as the
video site approaches the 10th anniversary of its inception. Music Key has been
speculated about for months while Google Inc. wrangled over the licensing terms
with recording labels. The service, priced initially at $8 a month, is
comparable in cost to other digital music subscription services sold by
Spotify, Apple Inc.’s Beats and Google’s own 18-month-old streaming service
tied to its Android “Play” store. But Music Key subscribers will be able to
stream through the Google Play service at no additional charge, too.
YouTube also is unveiling
a new tab devoted exclusively to music on its mobile apps and website. This
option is meant to make it easier for the video site’s 1 billion users to find
specific songs and entire albums, even if they aren’t subscribers.
Most music
subscription services own the rights to the same catalogues, making their
ability to learn listeners’ preference to create appealing playlists
particularly important. Music Key, though, will offer the unique distinction of
being able to show artists performing their songs too.
That difference could
help lure listeners away from Spotify, which says it has about 50 million
users, including 12.5 million subscribers, said Mark Mulligan, a longtime
industry analyst with Midia Research. And YouTube’s redesigned library of free
music could do even more damage to Spotify and other services, such as video
site Vevo, where people flock to check out songs at no cost. Expanding the
audience that listens to free music would be profitable for Google because that
would yield more opportunities to show ads — the main way that the Mountain
View, California, company makes its money anyway.
“A cynic might say
that Google is only doing this subscription service on YouTube so it would get
the rights to do what it always wanted to do with the free service,” Mulligan
said.
Google’s main goal “is
to make the music experience better on YouTube,” said Christophe Muller, who
oversees the company’s music partnerships.
Music Key initially
will be offered on an invitation-only basis in the U.S., United Kingdom, Spain,
Portugal, Italy, Ireland and Finland. The first batch of offers will be sent
out next week to YouTube viewers with a history of watching a lot of music
clips. Anyone interested in an invitation can request one at
http://YouTube.com/MusicKey . After a free six-month trial period, Music Key
will temporarily cost $8 per month before escalating to its standard price of
$10 per month.
Besides removing all
ads, Music Key also gives subscribers two other perks: the ability to continue
playing songs while the screens of mobile devices are locked and the option to
download tracks so they can be played without an Internet connection. The
offline music can only be played in Music Key’s mobile app.
Google Inc. bought
YouTube for $1.76 billion in 2006, a price that some analysts questioned at the
time of the deal because the service barely had any revenue and was drowning in
copyright complaints about pirated clips of music videos, television shows and
movies. After Google took over, YouTube set up a more stringent system for
blocking pirated content to placate copyright owners. Recording labels now use
the video site to help promote new songs and artists. The ads running within
those music clips have generated more than $1 billion for the performers and
recording labels, according to Google.
The world’s three
largest music labels — Universal, Sony and Warner — all have reached licensing
deals with YouTube as part of the new subscription services. Hundreds of
independent labels, including some that had been holding out for better terms,
also are on board. Financial details haven’t been disclosed.
YouTube is expected to
sell $7.2 billion in advertising this year, based on estimates from the
research firm eMarketer. Google has never disclosed how much revenue flows
through YouTube. Music Key will be doing well if it attracts enough subscribers
to generate $500 million in revenue after its first year in business, said
Midia’s Mulligan.
Associated Press