June 19 ,2014 | by Hari Srinivasan

YouTube confirms launch of paid music service

Launch of paid music service

YouTube is launching a paid music service in a move designed to challenge companies like Spotify.

YouTube has become hugely influential in the music industry, with growing numbers of hit songs from artists who established a fanbase through the video streaming site. But now, Reuters reports that the firm has finally confirmed that it will be launching its own paid music service to rival firms such as Spotify and Pandora.

The Google-owned company has announced that it is partnering with “hundreds of major and independent” labels, to put together the streaming service.


According to the Financial Times, users will be able to pay a monthly fee to watch videos or listen to music on any of their devices without interruption from adverts. What’s more, the service will be available whether or not users are online at the time.

Some 95 per cent of the record labels that YouTube already had deals with for its existing music video site have signed new agreements for the paid service, the company says. But as with all streaming services, the labels that have not signed deals are often more important to success.

However, it has also been suggested that to keep the user experience consistent on the paid service, videos from some music labels will need to be blocked on the free site.

Several independent labels have complained about the way YouTube is approaching deals for the paid music service, accusing the streaming giant of pushing unfavourable terms. In fact Rolling Stone says that Alison Wenham, chief executive of the Worldwide Independent Network, even described its behaviour as “bullying”.


Though YouTube says that its paid service will bring in new revenue for its partners, the fact that content from those who have not signed on will be blocked in some countries under the terms of earlier deals is unlikely to please many fans. Bands like Arctic Monkeys and stars such as Adele could potentially see their songs taken down from the site.

Whether YouTube’s new service manages to eat into the market share enjoyed by Spotify remains to be seen. But if there’s one thing the battle between Apple and the streaming giant for the rights to Coldplay’s new album demonstrates, being able to provide access to more content than competitors is often the key to success in the streaming industry.

Hari Srinivasan

Hari is the LSBF Blog's News Editor. He manages the editorial content on the blog and writes about current affairs, SME, entrepreneurship, energy, education and emerging market news.

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