YouTube Readies Subscription-Based Music Streaming Service

According to sources, YouTube will debut a paid music service in March, marking the third attempt by parent company Alphabet to compete with Spotify and Apple. Warner Music Group has reportedly already signed on to the new effort and discussions are underway with the other two major record labels, Sony Music Entertainment and Universal Music Group, as well as Merlin, an alliance of independent labels. Apple and Spotify’s paid streaming music services have helped the music business grow after two decades of decline.

Bloomberg reports that, “the new service, internally referred to as Remix, would include Spotify-like on-demand streaming and would incorporate elements from YouTube, such as video clips.” According to the same sources, “YouTube has reached out to artists to seek their help in promoting the new service.”

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Remix may help to assuage the long-standing complaints of music industry executives over the low revenues from YouTube, “which they criticize for not compensating them enough, considering how much people use the site to listen to tunes.” About one billion users a month visit YouTube, where “music is one of the most popular genres of video.”

In addition to its negotiations with Sony and Universal, next year YouTube “also has a negotiation with Vevo … [which] owned by Universal and Sony, distributes music videos for their acts.” When YouTube launched Red, “the music industry had hoped Red would be devoted to music,” but, instead, YouTube turned it into a destination for original video such as science-fiction comedy “Lazer Team” and a reboot of “The Karate Kid.”

Google originally introduced Google Play Music, an audio-only streaming service, in 2011, and then debuted subscription-based YouTube Music Key in 2014 for ad-free music videos. The latter “morphed into YouTube Red in 2016.” Last year, former Warner Music executive Lyor Cohen was brought on to oversee YouTube’s music operations and serve as a liaison to the record business. Google moved its Google Play Music staff into YouTube, and Cohen then stated plans to create a new paid service.