Youtube debuts subscription music users

San Francisco (AFP) - YouTube on
Wednesday introduced a long-
rumored subscription music video
service with ad-free access to tunes
in a challenge to Spotify, Pandora,
Apple and others.
YouTube Music Key launched in a
test, or beta, mode, in Britain, Spain,
Italy, Finland, Portugal, Ireland, and
the United States with free trial
periods, and introductory monthly
fees of $7.99.
"Thanks to your music videos,
remixes, covers and more, you ve
made YouTube the biggest music
service on the planet," the Google-
owned YouTube music team said in
a blog post.
YouTube Music Key is designed to
let users listen to music without
ads; to keep playing music videos
even if device screens are locked or
other applications are in use, and to
play music even when not connected
to the Internet.
Subscriptions to the new YouTube
Music Key will come with access to
Google Play Music service for mobile
devices.
The service is being launched first
with invitations sent to big music
fans, then will be made available
worldwide, according to Google,
which bought the video sharing
platform in eight years ago in a deal
valued at $1.65 billion.
- Getting labels on board -
YouTube recently inked a deal with a
group of independent record labels
as part of the behind-the-scenes
work to provide content for Music
Key.
YouTube struck an agreement with
Europe-based rights agency Merlin
after months of negotiations, the
Financial Times said Wednesday in a
report citing sources familiar with
the matter.
Record labels representing 95
percent of the music industry have
already signed up to the new terms
but Merlin, which represents more
than 20,000 labels from 39 countries,
had been holding out.
Contacted by AFP, Merlin declined to
comment.
Google also declined to comment on
the report, but said that "hundreds
of major and independent labels"
have partnered with YouTube as it
expands into a subscription service.
The California-based Internet titan
echoed an earlier statement that
hopes YouTube will serve as "a
global platform for fans and artists
to connect, and as a revenue source
for the music industry."
YouTube earlier this year threatened
to block the videos of artists like
Adele and Arctic Monkeys on its free
site if they did not sign up to terms
of the subscription service.
YouTube is the world s biggest
online source of free streaming
music and the site has about a
billion users a month.
Industry tracker eMarketer expects
YouTube to rake in about $7.2
billion in ad revenue this year, up
from $5.6 billion in 2013. More than
half the money taken in this year
will go to YouTube content partners,
with the Google-owned service
keeping about $3.24 billion,
according to eMarketer.
Online radio continues to gain
popularity in the United States, with
adults here spending an average of
39 minutes daily listening to it, the
industry-tracker said.
California-based Pandora was ranked
the top source for streaming radio.
"Freemium models combining free
ad-based access and fee-based
subscriptions have become the norm
in digital media -- Spotify, Pandora,
and Hulu come to mind -- and
there s no reason Google can t do
the same with YouTube," said
eMarketer senior analyst Paul Verna.
The analyst expected advertising to
remain the primary source of
revenue at YouTube.
YouTube chief Susan Wojcicki said at
a technology conference in California
last month that the ad-supported
model "is really great in the sense
that it has enabled us to scale to a
billion users (and that) anyone can
access the content."
But she added that "there are going
to be cases where people will say, I
don t want to see the ads, or, I
want to have a different
experience. "