It’s been a lot of years coming, but today YouTube finally announced its landmark new paid subscription service, ‘YouTube Red.’ The service will cost $9.99/month, and it launches on October 28th in the U.S. with other territories to follow. The move promises to be excellent news for rights owners, especially as YouTube also announced a standalone ‘YouTube Music’ app that will compete directly with the likes of Spotify and Apple Music.
One primary advantage for end-users will be the removal of ads for all Red subscribers. While this is an exciting and oft-lauded feature of paid services, it’s worth remembering that the majority of YouTube’s ads can already be skipped after 5 seconds. Whether this will be a killer feature for the new service has yet to be seen.
Additionally for end-users, YouTube’s Red-enabled apps will now support better background playing and offline features. Videos and songs will be available for offline use in a variety of qualities (for storage management), and even playlists will be included in the fun.
For musical artists and rights holders the most exciting aspect is YouTube Music, the public version of YouTube’s beta Music Key service. YouTube Music will integrate with Google Play Music, so subscribers to one service will automatically have access to the other. Additionally, YouTube is touting its “discovery” features, which appear to mirror the set-it-and-forget-it functionality of Pandora. YouTube Music is clearly intended to follow the pathway set out by Apple Music, wherein a gigantic installed base will be expected to lead to increased member numbers.
Rights owners should be excited as well, as The Verge claims YouTube has fully “convinced its big music label, television network, and movie studio partners. Many of these big media companies requested a more favorable cut of the subscription revenue than the service was offering to the average YouTuber, on the grounds that their premium content would be the main driver of subscriptions. But YouTube held out, and in the end almost all the big players came along. The only one that hasn’t is Disney, but YouTube plans to forge ahead regardless, saying it has 98 percent of its content covered by agreements with rights holders.”
Finally, a lion’s share of the money collected from Red subscriptions will likely be poured into “Originals,” YouTube’s new exclusive content offering. By partnering top YouTube stars with television and movie producers, YouTube will attempt to capture a part of the market currently being owned by online content providers like Netflix and Hulu.
The real question: will people start paying for a service that’s been free for over a decade? We have to wait and see.
Want MediaNet to power your digital music subscription service or experience? Click here to contact us!