YouTube plans to launch a paid streaming music service, amid
criticism that its existing, free video website might block
the music videos of labels that do not agree to its terms.
YouTube has partnered with "hundreds of major and
independent" music labels for the new service, the company
said in a statement, confirming long-running rumors that the
world's most popular online video website will offer a paid
The news comes as some music trade groups have criticized
YouTube's plans to potentially block the content of certain
labels from appearing on YouTube's free, ad-supported Website
unless they sign deals to participate in the new,
subscription streaming music service.
The deals that YouTube is offering are on "highly
unfavorable, and non-negotiable terms," according to a news
release issued by the Worldwide Independent Music Industry
Network last month.
YouTube declined to comment on the terms of the deals, but
said in a statement that the new service would provide new
revenue for the music industry.
"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.
YouTube has already signed deals for the paid service with 95
percent of the music labels that it previously had deals with
for its existing, ad-supported music video webiste, a person
familiar with the matter said. Blocking certain music labels'
videos from appearing on YouTube's free website might be
necessary in order to provide a consistent user experience
for the paid service, the person said.
The YouTube service is expected to launch at the end of the
summer and will allow users to listen to music without any
ads, according to a person familiar with the situation. Among
the other features expected are the ability to listen to
music offline and the ability to listen to an artist's entire
album instead of just individual songs, as is currently the
case on YouTube, the person said.
Streaming music services such as Spotify and Pandora are
becoming increasingly popular among consumers, as digital
music downloads decline. Apple Inc announced plans to acquire
streaming music service and premium headphone maker Beats for
$3 billion last month.
Google launched the $9.99-per-month Play All Access
subscription music service in 2013. The forthcoming YouTube
paid music service could potentially work in coordination
with the Play service so that consumers aren't forced to
subscribe to two separate services, the person familiar with
the situation said.