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YouTube unveils platform-wide subscription service, and it’s Music Key RIP

By | Published on Thursday 22 October 2015

YouTube Red

So, YouTube has unveiled its subscription service and, as expected, it incorporates and replaces the video site’s planned subscription music set-up. Sort of.

YouTube Red, as it shall be known, will launch in the US on 28 Oct. For $9.99 a month – or $12.99 a month if you subscribe via iOS, because of the bloody Apple Tax – you will lose the ads, and get offline viewing, background listening for music videos, and upfront access to a series of original content featuring premiere league YouTube stars. Oh, and Google Play Music audio thrown in for good times.

The new subscription service builds on YouTube’s past attempts at charging for content – with stand-alone subscription channels and a tip-jar approach – and in particular with Music Key, the year-in-development premium music service that will now never go properly live. Because, the firm’s Chief Business Officer Robert Kyncl told The Verge: “The most common and most frequent point of confusion [with Music Key] was why this set of features didn’t work across YouTube”.

Getting the all-encompassing YouTube Red off the ground required convincing the YouTube stars, and the big media and entertainment firms which operate channels on the platform, to opt in to a new deal where they share in subscription revenues as well as ad money. And while many of the smaller YouTube operators have seemingly been forced into that new deal, some of the bigger players – like the record companies when Music Key was being negotiated – will have made certain demands.

It’s thought that some asked for a bigger cut of subscription revenue than they get from the ads, though the Google subsidiary is thought to have stood its ground in the main. Quite what the Red venture means for the record labels and music publishers’ deals is as yet unclear, but Kyncl says 98% of YouTube content providers are on board, with Disney the big hold out.

By offering subscribers upfront access to new original content, YouTube’s big move into subscriptions also sees the firm tread into the territory of newer start-up competitors like Vessel. It will be interesting to see how the fans of the YouTubers involved in this premium content react to having to pay to get immediate access to their latest offerings, and whether their core channels – still available for free with ads – take a hit as a result.

Obviously the video platform hopes that these premium programmes will persuade those avid YouTube viewers to pay, though it remains to be seen if the young consumers who make up a sizable portion of that audience – and who have grown up expecting the content they crave to be served up on-demand for free – decide that $9.99 a month is a good deal.

For the music community, YouTube’s shift from Music Key to Red means their content is no longer the focus, and the subscription income will have to be shared more widely. Though, YouTube would counter, going this route should mean there will be lots more subscription revenue to go round.

Also, arguably, it means YouTube’s big play in music isn’t so closely competing with Spotify, Deezer and Apple Music, possibly targeting a different demographic, people who were never likely to sign up for a $10 a month stand-alone music service. Meaning YouTube, like Amazon with Prime Music, is going for the mid-market that the music-specific platforms are not currently targeting.

Though the Spotifys and Deezers of the world are likely to point out that all that free music sloshing around the YouTube network is still a problem as they try to sign up more paying users and, perhaps most importantly, makes the prospect of them turning off their own try-before-you-buy freemium levels an unrealistic proposal.

YouTube isn’t entirely bailing on a standalone music product, with a new app called YouTube Music also incoming, available to both freemium and premium users, and aimed at people who just want to navigate the music content on the video platform. So, there you go music people. According to YouTube, you’re important enough for your own app, but not for your own subscription service.



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