YouTube unveils their new paid subscription service at the YouTube Space LA in Playa Del Rey, Los Angeles, California, United States October 21, 2015. REUTERS/Lucy Nicholson
November 12, 2015
By Deborah M. Todd
SAN FRANCISCO (Reuters) – YouTube’s new music-streaming service aims to use the site’s massive video collection to bury the competition with content.
Alphabet Inc launched the YouTube Music Mobile App on Wednesday, less than a month after rolling out YouTube Red, a $9.99 per month service that provides ads-free access to all YouTube services.
The move pits the digital video library against established streaming services in a battle YouTube executives say they are in position to win.
Spotify leads the market with approximately 20 million paid subscribers as of June, followed by Apple Music, which debuted in June and reported 6.5 million paid subscribers in October.
The YouTube app is free for all users but only YouTube Red accounts can access its full range of options.
Red users can turn data-sapping music videos into audio-only streams and listen to audio of all videos while multitasking on devices with the background mode function. They can also download songs to an in-app playlist that runs on or offline.
With or without Red, customers can see stations personalized according to songs, genres, artists and titles. They can find an artist’s complete album collection and see related items ranging from live performances to amateur covers.
YouTube artists also get a piece of the deal through a percentage of YouTube Red subscriptions. YouTube did not provide details but said the majority of revenue is paid to partners.
To avoid siphoning users from Google’s music-streaming store Play, users with subscriptions to either YouTube Red or Google Play can access either site.
T. Jay Fowler, YouTube’s head of music products and creator of Beats-owned MOG music streaming service, said a beta streaming service launched last year lead to an improved Red model and a plan to use content to drive deeper engagement.
“With this beta already in progress the data was there that showed there was an appetite for something different,” he said.
Unique amateur videos and a new virtual reality video format could give YouTube an advantage but all the bells and whistles may be too much for average users, said Cortney Harding, a consultant who links startups to the music industry.
“I think it’s going to be tricky because the music app is separate from YouTube Red, plus they have other separate apps,” Harding said. “If I’m a casual user I’m going to find that confusing.”
(Reporting by Deborah M. Todd; Editing by Lisa Shumaker)