YouTube en­ters on­line mu­sic bat­tle

The Southland Times - - Front Page -

YouTube is in­tro­duc­ing a US$10a-month mu­sic-stream­ing ser­vice, a strate­gic con­ces­sion to record la­bels that an­a­lysts say could strug­gle to find an au­di­ence.

The new YouTube Mu­sic, re­branded as part of a shake-up of YouTube Red, will charge users a monthly fee to watch ad-free mu­sic videos. To dif­fer­en­ti­ate it­self from the lead­ing mu­sic-stream­ing apps, YouTube is play­ing up its ex­clu­sive content and per­son­alised rec­om­men­da­tions. The ser­vice will also rec­om­mend mu­sic based on a user’s lis­ten­ing his­tory and lo­ca­tion.

The plat­form will launch in the US, Aus­tralia, New Zealand, Mex­ico and South Korea on Tues­day. Users will also be able to cue up mu­sic with­out know­ing a song’s name by search­ing for things like ‘‘that hip­ster song with the whistling’’ or song lyrics, although users of ad-sup­ported YouTube can do that as well.

YouTube has drawn bil­lions of users by be­com­ing the des­ti­na­tion for lis­ten­ing to mu­sic with­out pay­ing for it, as long as they can tol­er­ate ads. Mu­sic is one of its most pop­u­lar cat­e­gories.

YouTube has been at odds with the mu­sic in­dus­try for years, said Rob San­der­son, an an­a­lyst at MKM Part­ners. Mu­sic la­bels have pressed stream­ing com­pa­nies for a greater share of revenue and more ways for lis­ten­ers to pay for mu­sic. But YouTube has not seen much suc­cess selling subscriptions, San­der­son said, even though it is the big­gest po­ten­tial threat to in­dus­try leader Spo­tify.

YouTube does not dis­close how many peo­ple pay for YouTube Red, its premium ser­vice. (YouTube Red’s orig­i­nal video content will now be called YouTube Premium and will cost US$12 a month.) Ac­cord­ing to Mark Mul­li­gan, a mu­sic tech­nol­ogy an­a­lyst with Midia Re­search, about 5 mil­lion peo­ple are sub­scribers, with an­other 5 mil­lion pay­ing for Google Play Mu­sic.

‘‘YouTube is un­likely to be­come the lead­ing mu­sic sub­scrip­tion ser­vice soon, but there is no deny­ing that it has clearly upped its game,’’ Mul­li­gan said in a blog post.

In an in­ter­view at Re­code’s Code Me­dia con­fer­ence, YouTube chief ex­ec­u­tive Su­san Wo­j­ci­cki of­fered clues as to why the com­pany chose to split its premium content and re­brand its premium ser­vice. ‘‘YouTube Red is a ser­vice that is re­ally a mu­sic ser­vice,’’ she said, adding that ex­clu­sive shows are added on top of that ser­vice.

By sep­a­rat­ing its mu­sic and premium video ser­vices, YouTube may be at­tempt­ing to boost its brand as a mu­sic streamer, as an es­sen­tial ser­vice that can dis­place com­peti­tors.

‘‘The days of jump­ing back and forth be­tween mul­ti­ple mu­sic apps and YouTube are over,’’ the com­pany said in its an­nounce­ment.

Mu­sic-stream­ing com­pa­nies have long had strained re­la­tions with mu­sic la­bels, fac­ing ac­cu­sa­tions that they don’t fairly com­pen­sate artists for their cre­ative work and for en­cour­ag­ing au­di­ences to pil­fer mu­sic. But in re­cent years, sub­scrip­tion ser­vices have po­si­tioned their busi­nesses as vi­tal contributors to the mu­sic in­dus­try’s resur­gence, by con­vinc­ing mil­lions of lis­ten­ers to pay for on-de­mand mu­sic.

It’s un­clear, how­ever, how YouTube can cut through a crowded field. YouTube’s lat­est push into paid mu­sic stream­ing faces stiff com­pe­ti­tion from ri­vals that al­ready com­mand mas­sive au­di­ences.

Spo­tify leads the in­dus­try with 75 mil­lion pay­ing sub­scribers, and Ap­ple Mu­sic is also gain­ing steam. Ap­ple chief ex­ec­u­tive Tim Cook said dur­ing an in­ter­view on Bloomberg TV that the ser­vice now has 50 mil­lion users, com­bin­ing pay­ing sub­scribers and peo­ple on free tri­als. YouTube Mu­sic is also charg­ing just as much as Spo­tify and Ap­ple Mu­sic.

YouTube Mu­sic will charge users a monthly fee to watch ad-free mu­sic videos.

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