YouTube is reportedly prepping to launch a new music subscription service in March, according to Bloomberg. If it does, this would be the third attempt by the Google-owned company to pitch its service against the likes of Apple and Spotify.
YouTube Remix – big challenges ahead
The rumored name of the service is YouTube Remix, and it would feature an on-demand streaming video clips from YouTube, sources aware of the development told Bloomberg. Reportedly, YouTube has already negotiated with recording label Warner Music, but talks with Sony Music Entertainment and Universal Music Group are still on.
YouTube is also reportedly in talks with Merlin, which represents a group of independent labels to offer its services on the upcoming platform, notes AppleInsider. Back in 2015, Merlin clocked a deal with Apple Music streaming service just days before the service was set to launch in 2015.
As of now, there is no announcement over the pricing of YouTube Remix, but it is expected to be competitive enough to challenge the biggest names like Spotify and Apple Music, both of them offering basic streaming plans for $10 a month. Spotify has now more than 60 million paying subscribers while Apple Music stands at 30 million.
Back in October, Microsoft closed its own Groove music service and collaborated with Spotify. All its customers were asked to transfer their content and playlist to Spotify. YouTube Remix will not just have the established players to compete against, it will also have the relatively new players like Tidal.
YouTube desperate for win in paid music market
Alphabet is desperate to have a product in the growing music market. In December of last year, Goldman Sachs stated that the market would grow to $28 billion in 2030. Earlier this year, Google revealed plans to combine Google Play Music and YouTube Red into one service to make it better positioned to compete with Spotify and Apple Music.
Google launched the Play Music app, an audio-only streaming, in 2011, and three years later, it launched YouTube Music Key, a subscription service offering music videos and ad-free songs for $10 a month. In 2015, the app was rebranded as “YouTube Red,” and offered all kinds of YouTube Videos. However, YouTube’s service failed to gain popularity all three times.
Last year, YouTube hired former Warner Music executive Lyor Cohen as the head of its music operations. Additionally, many Google Play Music employees have also been absorbed to work on YouTube Remix, notes BGR.
YouTube would need to offer a differentiated product compared to what is already available to the users. The rumored features of YouTube Remix, however, sound similar to those offered by Apple Music, where the subscribers get on-demand music, a variety of music videos and original content such as Carpool Karaoke and Planet of the Apps, notes AppleInsider.
In the past, YouTube has been criticized for not recognizing major music labels when it comes to giving compensation. On the other hand, several music users post remixes and other content on the platform, making it difficult for YouTube to identify the original content and pay compensation to the original creator. So, this is also something that YouTube will have to sort out.