First reported by Bloomberg, citing people familiar with the matter, the new paid-for service is likely to include on-demand music streaming and incorporate elements from YouTube, such as video clips.
Tentatively called Remix, the new service might also placate the record industry, which has criticised YouTube for years over the amount it pays out to labels and artists even though music videos are among the most watched on its entire platform.
Bloomberg’s sources also revealed that YouTube has already signed up Warner Music Group, one of the three biggest music labels in the world, and that the other two – Sony Music Entertainment and Universal Group – are engaged in talks. Merlin, a consortium of independent labels, is also involved in the discussions.
The Recording Industry Association of America (RIAA) reported earlier this year that total revenues from streaming platforms jumped 68% to $3.9bn in 2016.
It meant that, for the first time ever, streaming music platforms generated the majority (51%) of US music industry revenue last year, boosting overall sales to $7.7bn.
With the likes of Apple Music and Spotify driving much of this growth, Bloomberg noted that major music labels say the growth would be even more significant if YouTube was more fully involved.
It has tried before, however. Google introduced Google Play Music, an audio-only streaming service, in 2011. And three years later, it then launched YouTube Music Key, a subscription service offering ad-free music services.
Yet after Music Key’s slow growth, Google then rebranded the service in 2015 to YouTube Red, which is reported to have just a fraction of the subscriber base of Apple Music and Spotify.
Sourced from Bloomberg; additional content by WARC staff