Los Angeles - YouTube plans to
introduce a paid music service in March, according to people familiar
with the matter, a third attempt by parent company Alphabet to
catch up with rivals Spotify and Apple.
The new service could help appease record-industry executives who
have pushed for more revenue from YouTube. Warner Music Group, one of
the world’s three major record labels, has already signed on, said the
people, who asked not to be identified discussing private talks.
is also in talks with the two others, Sony Music Entertainment and
Universal Music Group, and Merlin, a consortium of independent labels,
the people said.
Paid services from Spotify and Apple Music have spurred a recovery in
the music business, which is growing again after almost two decades of
decline. Yet major record labels say the growth would be even more
significant if not for YouTube, which they criticise for not
compensating them enough, considering how much people use the site to
listen to tunes.
Music is one of the most popular genres of video on
YouTube, which attracts more than a billion users a month.
YouTube hasn’t had the same success as Apple or Spotify in convincing
people to sign up for its paid music services, though it’s not for lack
of trying. Google introduced audio-only streaming service Google Play
Music in 2011. YouTube Music Key came along in 2014, giving subscribers
ad-free music videos. That morphed into YouTube Red in 2016, letting
users watch any video without advertising.
The new service, internally referred to as Remix, would include
Spotify-like on-demand streaming and would incorporate elements from
YouTube, such as video clips, the people said. YouTube has reached out
to artists to seek their help in promoting the new service, one of the
YouTube must overcome several hurdles to meet a March target. Not
only has YouTube been trying to negotiate new deals with Universal and
Sony for more than a year, but it also has a negotiation with Vevo
looming early next year. Vevo, owned by Universal and Sony, distributes
music videos for their acts.
Though the music industry had hoped Red would be devoted to music,
YouTube has positioned it as a home for original video projects like
science-fiction comedy “Lazer Team” and a reboot of “The Karate Kid.”
YouTube hired former Warner Music executive Lyor Cohen last year to
help oversee its music operations and serve as a liaison to the record
business. Google folded much of the staff for Google Play Music into
YouTube earlier this year, and Cohen announced plans to create a new