MIMO - When Music is Your Fix

YouTube to Add Subscription Service

Targeting mobile users, aims to compete with Spotify, Pandora

Yeah. So apparently, Google is still not big enough.

This week, numerous reports surfaced that Google’s on-demand video service YouTube is planning to release a subscription-based service before the end of this year. The move is largely targeted toward mobile users, and aims to compete with other existing streaming services like Spotify and Pandora.

The addition of a subscription tier actually makes good business sense for the streaming video behemoth because it requires very little in the way of revamping. YouTube claims that 40 percent of its video streams are being viewed on mobile devices already; the only real changes that a subscription service adds will be a removal of ads and the ability to watch videos while offline. Users who do not wish to subscribe will still have access to the free, ad-based tier that has been in place since YouTube got started. The real advantage YouTube has in entering the subscription streaming market is that will be offering video streaming, while competitors like Spotify, Pandora and Rdio currently do not—and YouTube will charge the same monthly $10 subscription rate as the others.

Even while it seems a smart move, one can’t help but wonder at the fairness of it in the marketplace. In recent years, YouTube has already become the number-one source for online music access on the planet, and more teens and young adults get their music fix from YouTube at this point than from mainstream radio. YouTube’s ad-based service is extremely profitable on its own, while other streaming services are struggling to the point that they are actually steering their listeners toward subscriptions in order to remain solvent. So why does YouTube feel compelled to take the morsel out of the mouths of its struggling competition when it already is dining in style?

Ah, but you know the saying: All is fair in love and war—and in business. Or something like that. We shall see what unfolds.


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About the Author

on MUSIC IS MY OXYGEN WEEKLY.

David Tillman is an independent composer/arranger whose primary work involves writing jingles for commercials for radio and television, with several film and television placements to his credit as well. David has a fascination for all things related to the music business and the music industry in general, an obsession which his wife finds to be mildly unhealthy at times. His personal tastes in music are in electronica and industrial rock, and include The Chemical Brothers, Daft Punk and Nine Inch Nails (he loves that Trent Reznor is writing soundtracks!). When not in his office or in his man-cave, David enjoys skiing, hiking, the occasional game of golf, and sometimes just lounging by the pool. David lives with his wife and three children in Los Angeles, CA.

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