YouTube Will Soon Lose Its Music Streaming Dominance

How much of YouTube’s focus is on music? Clearly not much.

Listening to music on YouTube is incredibly frustrating. The sound quality is horrible. Mostly because the fan uploaded videos have been compressed multiple times over. And were uploaded years ago before YouTube offered HD. Even official music videos sound awful unless the HD option is selected – which is impossible on a phone.

There is no organization. No information. No albums.

Sure, YouTube is the number one streaming service on the internet NOW.  But will it be in 3 years?

I doubt it.

It’s been around longer than Spotify, Beats, SoundCloud and every other streaming service. People are comfortable with it.

Today it’s easy to find music on YouTube. Instantly. Most songs are on YouTube. But not all.

And, it’s a headache to find the track you want. Maybe you don’t want the studio version. Maybe you want the 1985 live release.

It’s why so many left the illegal P2P sites for iTunes. iTunes offered a headache-less alternative at a reasonable price. People will pay for convenience.

Sure, YouTube is the go to music streaming service for kids. Any parent can attest to this.

But not for music lovers.

College kids listen to Pandora while studying. It’s passive. And easy.

Extended listening on YouTube is not easy. You can’t just turn it on and go like you can Pandora or Spotify or Beats or SoundCloud.

You can make playlists, sure, but that takes effort.

Why is terrestrial radio still so strong? Because it takes zero effort to turn it on in the car. No plugging in the iPhone. No scrolling through songs while weaving through traffic. Just turn it on. Select a favorite station and go.

But cars are integrating Pandora and Spotify. Pandora started early and has contracts with over 16 car companies.

Satellite radio has been in cars for some time now. But only the elders have adopted it because of the paywall. And, It’s just not cool.

Don’t give me a disgusting image of your hard on for Howard Stern, you grandpa. Howard Stern is ‘cool’ for the plus 40 crowd. But they’re out of touch. They don’t affect change. You want change? You want to see the future? You look to the youth.

Pandora is cool. Spotify is cool.

When there were no alternatives to terrestrial radio, we accepted it. We channel surfed until we found something bearable for rush hour.

But with Pandora and Spotify making active advances in the auto industry, this is all going to change.

And car companies will not similarly integrate YouTube – unless they want a cornucopia of lawsuits. “No officer I wasn’t watching Miley ride the wrecking ball, I just wanted to hear the song!” “Step out of the car son.”

Most new cars come with USB and Aux inputs. It’s easy to hook up the phone and stream from any service – including YouTube. So most people are going about it this way. Right now.

However, once every new car comes equipped with Pandora and Spotify, YouTube will lose it’s music streaming dominance.

There is a tipping point coming in the near future for music streaming services. The kids will jump on board. They will soon choose Spotify or Beats over YouTube. Every time. Which service will win out? Time will tell. But YouTube is finished. At least in the musical sphere.

Just you wait.

It’s coming.

Photo is by mauritsonline from Flickr and used with the Creative Commons License.

45 Responses

  1. Dave Buerger

    Blah blah blah. In the end it doesn’t matter. As musicians, we use whatever works – NOW. If it changes later we’ll switch.

    • visitor

      Hahahahahaha… Oh Ari, you are so niave’… there’s a pending YouTube Music Streaming launch coming that may well bury not just Spotify, but everyone’s career’s with it…

      • TuneHunter

        Ari, did you get drunk with Daniel Ek last weekend?

        Universal needs those fast food advertising dollars to maintain living standards on Titanic.

        Let’s VeeVooooo!

      • Anonymous

        “Oh Ari, you are so naive”

        🙂 Somebody had to say it.

        YouTube is THE place to go for music in the real world — and it’s growing, growing, growing! Look at the numbers.

        While Spotify just loses money — and releases — by the hour.

        And why?

        Because it doesn’t have video. Because songs can’t go viral on Spotify. You just can’t share a tune on Spotify. Spotify still hides behind all these old-fashioned anti-sharing walls.

        YouTube is fast & easy: You get a link from a friend and — click!

  2. Sam

    How did this get past the editors? There is so much bs here it’s staggering — it’s like it was written in 2008. And his music is awful too.

    • Anonymous

      “it’s like it was written in 2008”

      Exactly! Like it or not, YouTube is the future.

      Kids want to be YouTube stars when they grow up. It’s their platform already — as consumers and producers.

      • TuneHunter

        I agree, but not as a unlimited cloud based music player.
        The future as a star creator, self-service Label-ONE, wholesaler of coded music to Radio or streamers and as a private copy rights registry with policing abilities already in on board will make everyone HAPPY!

        50 billion dollar YT as a hub of new music industry is possible before 2020.

      • TuneHunter

        I agree, but not as a unlimited cloud based music player.

        The future as a star creator, self-service Label-ONE, wholesaler of coded music to Radio or streamers and as a private copy rights registry with policing abilities already on board will make everyone HAPPY!

        50 billion dollar YT as a hub of 100B music industry is possible before 2020.

  3. xzxjennaxzx

    I agree with most of this statement. YouTube is still #1 in my eyes for seeing how bands/musicians actually perform live, or perform in music videos. But for on-the-go listening, I think Spotify will soon take the lead.

    Most young folks I know (from ages 10 – 21) are all using Pandora, until they find out they can make playlists on Spotify with specific songs and not have to skip all day long or listen to songs they don’t want to listen to. Young kids also don’t drive so they can watch Youtube videos all day long.

  4. Ray

    Clearly the author is not in the loop at what is going on over at YouTube.

  5. Tamas

    Radio and automated streaming is NOT for real music lovers. People who just turn on the radio (or anything), and make no effort, they don’t care what kind of music is going on… They just listen whatever is on. When you ask them what’s their favorite music, they say “I like everything” or “whatever is on the radio”. Usually these people “listen” the radio in the car at an extremely low volume, they don’t really listen, (taxi drivers for example lol) and you can’t even hear the music at this low volume… I never understood why they do this.

  6. shadesofsolveig

    YouTube is planning a streaming music service, at least that is the rumor. Several sites reported this late last year including AllThingsD and the Verge. That doesn’t mean they will succeed with it. Clearly this is an expensive business to be in because of the licensing fees, and customer loyalty may not matter, in which case its already a commodity business and the only issue is who can squeeze the cost structure. Apple is not yet in the on-demand streaming business, but the rumor is strong and they are a formidable competitor given the installed iTunes customer base. Pandora and Spotify continue to lose money for their investors.Rdio is hanging by a thread, and Rhapsody is still losing money. Beats now has Warner money and big names behind it, but it is too early to call it a winning play. They may simply be too late to the game, and they are gambling hard on the AT&T co-branding and distribution. Perhaps Google is just waiting until the on-demand streaming music market consolidates further. No need to hand all that money to the record labels just yet…

    • JTVDigital

      Yes they do, they showed an overview at Midem.
      It will certainly hurt Spotify and others quite significantly…

  7. toobad

    Was that a dig at Bob Lefsetz I read in there?? lol #shotsfired

    • Guile

      Which is funny because it reads like a lefsetz letter…

      • Bruce Burbank

        I was thinking the same thing when reading this. It’s like Ari made a concerted effort to write in the style of BL, with all the sentence fragments and declamatory statements as if they were handed down from some higher power. Most irritating writing style ever. Why would anybody want to imitate Bob Lefsetz? Unreadable.

        • toobad

          I do enjoy Bob’s writing though.. He definitely has some cool insight mixed in with the old man “get off my lawn” posts

  8. U Know

    YouTube is great for music streaming because of the search engine, which makes everything (variety of music/video) easy to find. It’s the whole package–one stop shop.

  9. GGG

    It won’t lose video streaming dominance, which means it won’t lose music video streaming dominance. I don’t get why people on this site can’t see the difference between YT and Spotify, et al. They are different animals that can serve different purposes.

    If someone wants to watch/share/whatever a video, they will use Youtube. No question. Video can/will still be an important aspect of some artists’ careers. Think anyone would have given two shits about Gangnam Style if it wasn’t for a fat guy doing a horse dance? No. The visual made that song, like it will others in the future.

    Then there will be people who don’t feel like having a video streaming, or searching through related videos to find other album tracks, etc. If you want to listen to a bunch of music from one artist without doing anything, Spotify is far easier than YouTube.

  10. PerveGriffin

    My 13 and 15 year old use Youtube constantly for music. That’s all I need to know about what the future holds.

    This is a stupid article.

    • Anonymous

      “My 13 and 15 year old use Youtube constantly for music. That’s all I need to know about what the future holds.”

      Spot on. Ari just doesn’t know any teenagers.

      YouTube is the hottest thing among teens since sex. They even have YouTubers on their walls.

  11. Nissl

    Doubt it. You’re right that Youtube needs a better UI to make it easier to passively surf (with smarter, Pandora-like recommendations) or just put on radio in the background. But like others said, that should be coming with their streaming service launch. Google Play recs and radio stations seem fine (though I’m an album-first listener, have barely touched them) and will surely be integrated.

    The killer app that Youtube has is video. Your music sub will also now remove ads from the non-music videos you watch for a few hours per week. (Yes, you can install Adblock, but we’re talking about the average person here.) I doubt Pandora or Spotify will be able to ever dent them there. And they have a massive traffic edge once they start converting the kids giving every hit 100m views.

    I’d be more wondering how Spotify is going to hold up once iTunes and Google launch their competitors this year. Aggressive phone plan bundling needs to be part of it, but it isn’t, not in the US yet. If they lose market/mindshare here, it could all go pear-shaped for them in a hurry.

  12. hippydog

    Heres why I think Ari is wrong..

    Quote ” Listening to music on YouTube is incredibly frustrating. The sound quality is horrible.[snip] There is no organization. No information. No albums. ”
    Ok.. Youtube isnt Vevo, but if Google wanted to they could incorporate the same features in a day or two.. right now I think they dont because they are letting the majors have some control..

    Quote ” You can make playlists, sure, but that takes effort… Extended listening on YouTube is not easy. You can’t just turn it on and go like you can Pandora or Spotify ”
    Theres an app for that… 😉

    ok.. I dont think their is an app for that, but I’m sure if Google wants it to happen, someone will be able to do it..

    Quote “However, once every new car comes equipped with Pandora and Spotify, ”
    it sounds logical at first, but if you read the Electronics Trade magazines like I do, you will see that the only ones thinking this is a good idea is the car manufacturers.. but history has shown that “tech” in cars never really takes off, for the simple reason it cant be updated properly and its insanely expensive to repair..
    IE: I guy buys a new car, 5 years later his fancy touch screen player still only allows him to use Deezer? guy is simply gonna bypass it ..

    sorry.. the most likely scenario is the predominate “music listening equipment” will end up being a smartphone.
    which means the idea the “spotify will rule” because its embedded in a cars system will NOT pan out..

    Now for the stuff you missed 😉

    Critical mass: (and infrastructure)
    youtube is already in enough countries, known by enough people, on enough different machines, that it will be really hard for ANY service to surpass its hold..
    sure.. if Google NEVER updates it, and basically lets it fail, it can lose dominance.. but they would really have to bury it for that to happen..

    one of THE most important parts is its existing connection to music, fans, and artists..
    all the other problems your talking about is simply an interface issue.. the pre-existing connections and agreements with the labels, and artists is worth gold..
    sure they can improve it lots, but the fact is they already HAVE IT in place..

    Google itself:
    What is the predominate way people advertise on the internet?
    Google adwords.. (sure, there is Bing, and Yahoo, etc, etc)..
    but Google is the leader..

    sure, other streaming services can also use ads (VS a subscription service),
    but Google (and youtube) can actually SURVIVE off advertising alone.. No one else can do that.

    my 2 cents 😉

  13. Anonymous

    “Pandora is cool. Spotify is cool.”

    You just killed whatever amount of cool Pandora and Spotify had left…

  14. Veteran - US MUSIC INDUSTRY 1970-today

    None of us really knows what is GOING to happen in 3 yrs, or 5 yrs, or 10 yrs from now. We have conjecture.

    Did the radio industry of the 1920s foresee the recording industry of the 30? Nope. That’s the reason we have ASCAP today. How far out was the pc seen? The internet? Digital files?

    In 1990 I was working towards a Masters degree and was studying DAB (digital audio broadcasting) for my thesis. The closest we’ve ever gotten is HD radio, which so far as been a cosmic flop, because it could not gain ubiquity in-dash.

    Whatever is popular in so far as music delivery systems in the future will be tied to the most convenient communication devices we can create. TODAY those are in dash and smart phones. TODAY. I’d wager nicely that those will be the dominant systems in 3, 5, and 10 yrs from now. They may not look as they do today, but the functionality is what we’re after, not the style or size.

    Those who most likely have the best idea of how things MIGHT look in 3-5 yrs from now are sitting in some lab somewhere, cooking solder and doing cad or something … they’re the geeks .. they’re the guys with the bright ideas and the backing to work on them.

    Industries disappear. Nothing lasts forever – and most things don’t last a lifetime. At 59, there’s been one hell of a lot of technological changes in my life.

    Today, I use a smartphone for EVERYTHING. Unlimited data plan. I listen to internet radio in the car.

    My 2 teenage grandsons use YouTube and Pandora on their phones.
    My twenty something kids use broadcast radio.
    My thirty something kids don’t really listen to music, unless it’s “kids” music in the car … and that’s usually geared to the tweens in the car, not the teens or adults.

    But, that’s just my family. 😉

  15. Brian Lewis

    Nowhere does Ari or the replies mention that in all the models of what will be, there is no money in any of them for the indie artist or their indie labels. My own experience is having an album released for one of the oldest rock/soul bands in Australia for two years. It was on every digital service, and only wholesale CDs and iTunes made 97% of all the revenue (CDs about 10:1 compared to digital). So I dropped all the other digital retailers. Same with a second title and different band I have had released for one year. Thousands upon thousands of streams for less than $10.The vast majority of my revenue is still CDs but that may be the age of my audience. In a word, SCREW streaming, I’ll take my bits and bytes and go home if that is what happens to the industry, unless they start paying real money for streams. Amazon and iTunes pay about 1¢ /stream, everyone else very small fractions of a cent. In another word, my artists are getting screwed, they get 60%-70% of net, bugger all for streams.

  16. TuneHunter

    This Muslim crusader has guts.
    Labels in the meantime, to keep warm, throw all they got into the YT fireplace.

    “Google ‘Thumbing Nose’ At Video Removal Order, Actor Says
    The actor who won a controversial court order forcing Google Inc. to remove an anti-Islam video from YouTube asked on Tuesday that the search giant be held in contempt for failing to comply, demanding massive sanctions over its “near-total disregard” of the injunction.”

      • TuneHunter

        He is one of the few working on conversion of Google from mindless religion of advertising!

        Ads around anything they can put their hand on – the best if content subject to advertising smoke is FREE.

    • hippydog

      Wow tunehunter

      i didnt realize you also were AGAINST freedom of religion, and freedom of speech..

      • TuneHunter

        What we got is middle ages, do you want to continue with it?

        For few silver coins and your girlfriend is burned at the stake on Sunday morning.

  17. Ill-informed

    the author clearly has no idea what’s happening in the background right now. wow.

  18. Jason Didner

    Wow Ari, you sure struck a nerve of controversy with this. People, calm down. it’s just one platform vs. another! Remember this, folks, and you’ll be fine: YouTube is where people go for music videos (like MTV). Spotify is like taking out music from the library for free; you can listen to whatever’s in their library (but don’t own it, so it could be in the library one day and gone the next), and Pandora is like the radio. Currently, YouTube is a bit of all three, when what it’s really good at is the MTV role. All Ari’s saying is that Spotify and Pandora will take over the music library and radio roles from YouTube. I’m sure they’ll still be the “MTV” in this scenario.

    The message for musicians is this: Always keep your suitcase packed; don’t sink your whole creative career into any one platform. And turn as many of those ‘likes,’ ‘subscribers’ and ‘followers’ into e-mail addresses as soon as possible so you can stay connected with your fanbase even if your favorite platform goes away.

    • Anonymous

      “you sure struck a nerve of controversy with this”

      Not even close, it’s the ‘Pigs-Can-Fly’ headline strategy: Say something you know is wrong — and we’ll debate it. It’s basic human nature.

      However, you’re spot on about the packed suitcase. Right now, we have two functional digital platforms, iTunes and YouTube, but it can change any day.

      What won’t change though, are the roles these platforms play: iTunes is where we earn our money. YouTube is where people find us.

      These functions are permanent. Before iTunes, we had record stores. Before YouTube we had radio/TV.

      After iTunes, we’ll have easier ways to buy songs. After YouTube we’ll have higher quality music videos. Nobody knows the details yet.

      What we do know is the direction of evolution: Forwards.

      Not back, from fast & easy music videos to audio hidden behind pay/password walls.

      • Anonymous

        …perhaps that’s why Spotify chose a super angry smiley for their logo?

        : (((

  19. George

    Yes, very in-the-style-of BL. Only BL would have a very different spin on it, and he probably would have the insider knowledge of any YT confidential plans (probably why he hasn’t taken this subject on as yet…)

  20. Anonymous

    OK guys, you can stop the discussion — I found out why Ari hates YouTube:

    YouTube hates Ari!

    His most popular video has 29 mill- oops, 29 thousand views! 🙂

    And it’s 4 years old!

    Then there are his, let’s say, less popular videos: 704 views, 884 views, 599 views, 908 views, 387 views, 406 views, 458 views, 108 views…

    Seriously, I’m not making it up — see for yourselves.

  21. Noel

    I think this article is approaching it from the sole viewpoint of music fans; not musicians.

    Musicians will primarily choose YouTube and SoundCloud to circulate their music. They avoid using Pandora and Spotify because these services have a barrier to entry for musicians.

    Music creation is getting ever easier. There may actually be more music creators than music fans. Certainly more than the ‘real music fans’ this article counts upon. So YouTube will continue to dominate in terms of music uploads. As of 2015, YouTube has 2 Billion songs and this number almost doubles every year.

    True, many of YouTube’s songs only gain a few hundred views, but a few hundred views multiplied by billions of songs is what IMHO will allow YouTube to dominate long into the future.

    People need to beware comparing millions of songs (Spotify) to billions of songs (YouTube). A million seconds = 12 days. A billion seconds = 31 years. YouTube is a colossus that doubles in size each year. Imagine an elephant that doubles in size versus an ant that doubles in size…the elephant will far out-scale the ant. YouTube has (long ago) reached the point of non-displacement.