YouTube’s new subscription service Music Key will launch on Monday to a limited amount of users, and will launch to the public sometime in 2015.
According to Rolling Stone, Music Key, YouTube’s competitor to other streaming services like Spotify and Rhapsody, will launch on Monday to YouTube’s biggest music listeners as a test run. After six months of the free service, YouTube will open the service to the public in 2015 for $10 a month, the same price as Spotify.
The new subscription service will offer a price for higher quality songs and videos without advertisements, and will still offer full albums by artists to non-subscribers. The new service will allow users to play music on their phones will using other apps and watching other videos.
The average user’s homepage will change by offering a tab that will allow users to browse through different artist and videos, and continually play music based on other artists, like Pandora.
With the introduction of Apple’s Beats Music and new services by Amazon, streaming services are beating out digital sales, with streaming revenue growing 51.3 percent in 2013. As the music industry continues to lose money due to piracy and people downloading music for free, the advertising revenue provided by streaming services offer the best revenue alternative for labels.
YouTube finally reached an agreement with indie labels after they claimed that YouTube offered significantly lower song licensing rates for major labels and offered better payment percentages for major labels. Merlin, a rights service, apparently represented thousands of indie labels and made a deal with YouTube. Otherwise, YouTube would have left out major indie acts in their new service, such as Radiohead, Adele, and Arctic Monkeys.
Describing their new service, YouTube wrote on their blog,
“Until today you couldn’t easily find and play full albums. In the coming days, you’ll be able to see an artist’s discography on YouTube, and play a full album with both their official music videos and high-quality songs our music partners added to YouTube.”
Online streaming services are continuing to grow, with Spotify growing to 28 million subscribers last year, although many say that YouTube is stealing subscribers by offering the same services for free. Midia Research reported that YouTube could cost the music industry $2.3 billion in lost revenue from potential subscribers sticking with YouTube’s free services. While YouTube does pay record companies a percentage of the ad revenue, according to the Recording Industry Association, American record companies only made $220 million last year in ad revenue.
YouTube’s music partnership director Christophe Muller told The New York Times, “We want to give fans more ways to enjoy music on YouTube, but also give artists more opportunities to connect with fans and earn more revenues.”
YouTube’s new streaming service Music Key will launch to the public sometime in 2015.
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