YouTube to launch paid music service

Wednesday 18 June 2014 23.35
Some music trade groups have criticised YouTube's plans for a paid service
Some music trade groups have criticised YouTube's plans for a paid service

YouTube has said it plans to launch a paid streaming music service, amid criticism that its existing, free video website might block the music videos of labels that do not agree to its terms. 

YouTube has partnered with "hundreds of major and independent" music labels for the new service, the company said in a statement.

The move confirmed rumours that the world's most popular online video website will offer a paid music service. 

It comes as some music trade groups have criticised YouTube's plans to potentially block the content of certain labels from appearing on YouTube's free, ad-supported website unless they sign deals to participate in the new, subscription streaming music service. 

The deals that YouTube are offering are on "highly unfavourable, and non-negotiable terms," according to a news release issued by the Worldwide Independent Music Industry Network last month. 

YouTube declined to comment on the terms of the deals, but said the new service would provide new revenue for the music industry.

"We’re adding subscription-based features for music on YouTube with this in mind - to bring our music partners new revenue streams in addition to the hundreds of millions of dollars YouTube already generates for them each year," it said in a statement. 

YouTube has already signed deals for the paid service with 95% of the music labels that it previously had deals with for its existing, ad-supported music video website, a person familiar with the matter said. 

Blocking certain music labels' videos from appearing on YouTube's free website might be necessary in order to provide a consistent user experience for the paid service, the person said.

The YouTube service is expected to launch at the end of the summer and will allow users to listen to music without any ads, according to a person familiar with the situation. 

Among the other features expected are the ability to listen to music offline and the ability to listen to an artist's entire album instead of just individual songs, as is currently the case on YouTube, the person said.

Streaming music services such as Spotify and Pandora are becoming increasingly popular among consumers, as digital music downloads decline. 

Apple announced plans to acquire streaming music service and premium headphone maker Beats for $3 billion last month.