YouTube Has a New Music Service, Blah Blah Blah

Google-owned YouTube Has a New Music Service, Blah Blah Blah

YouTube global head of music Lyor Cohen

So, Google is launching yet another attempt to break into the music streaming business.  But will fans rally behind YouTube ‘Remix’?  Or, will it end up as the third, unimpressive attempt to earn a slice of the streaming revenue pie?

In a bid to enter the streaming music market, Google launched Google Play Music.  Then, to provide unique original video content and uninterrupted music on mobile devices, the Google-owned YouTube launched YouTube Red.

Neither has made much progress gaining paid subscribers — at least compared to Spotify, Apple, or Amazon.

Over the summer, the video platform reported that it had 1.5 million paid subscribers, and another million on a free, 30-day trial basis.  Combined, both Google-owned services have nearly 7 million subscribers.

Spotify, on the other hand, has ‘well over’ 60 million paid subscribers, with 140 million monthly active users worldwide.  Apple Music is now hovering around 30 million.  Combining Prime Music and Music Unlimited, Amazon has 16 million subscribers on its streaming music platforms, according to recent estimates (though other estimates put Amazon ahead of Apple).

Clearly struggling to catch, Google has a new idea: why not launch a new music streaming service (once again)?

Maybe the third time’s the charm.

According to “people familiar with the matter,” YouTube will launch a new paid music streaming service next March codenamed ‘Remix.’  This marks the third time that parent company Alphabet has launched a streaming platform for music fans.

Bloomberg’s Lucas Shaw first broke the story.  According to Shaw, the new service may help “appease record-industry executives who have pushed for more revenue from YouTube.”  Music labels and top artists have long complained about the video platform’s unfair payouts.

YouTube has apparently already struck a deal with Warner Music Group.  The platform is currently “in talks” with Sony Music and Universal Music Group.

The big labels are very interested in fixing some dismal royalty payouts.

According to top YouTube executive (and former WMG CEO) Lyor Cohen, the platform pays out $3 per 1,000 streams (or a $3 ‘CPM’).  The RIAA, however, found that it actually pays closer to $1.50.

Even that might be an exaggeration.  Independent research shared with Digital Music News shows that YouTube actually pays $0.0006 per stream.  Unsigned artists earn $1,472 (the monthly minimum wage in the US) after 2.4 million plays.

The proposed service would include “Spotify-like on-demand streaming” along with some YouTube elements like video clips.

The popular video platform has also reached out the artists to “[promote] the new service.”  To help oversee its music operations, the company hired Cohen last year.  This summer, Google also confirmed that it would merge Google Play Music and YouTube Red.

The move to launch ‘Remix’ comes at a critical time for the company.  Early next year, YouTube will enter into negotiations with Vevo for a new deal.  The video platform has also been in talks with UMG and Sony “for more than a year.”  Major advertisers have also abandoned YouTube after two renowned publications discovered that the video service had monetized videos with pedophiliac comments.

It’s unclear whether Remix will co-exist with Google Play Music and YouTube Red, or if the new service will replace them.  And given the chaos that is Google, they probably don’t know either.

 


Featured image by Noa Griffel (CC by 4.0)

7 Responses

    • Paul Resnikoff

      Let’s see about that. This assumes that Cohen is actually in control of this combination process, or that it will be executed against.

      He’s also talking about YouTube Red, not Remix. Cohen has also suffered some serious credibility issues after claiming the service is paying $3 CPMs.

      All grist for the mill.

  1. meh2

    Lyor already said that YT and Google Play are getting merged:
    http://musically.com/2017/07/27/youtube-red-google-play-music-merge/

    This “Remix” app is the new, merged product.

    Daniel’s totally wrong about any of this being unclear. It’s been obvious what YT’s been up to since Lyor let the cat out of the bag back in July. The Billboard and Bloomberg articles seem to get it. They even mention that the YT and Play teams were merged earlier this year. The only question up in the air is whether YT will actually get this done by March (my bet is no).

    • Paul Resnikoff

      I hear what you’re saying. It does *sound* like a combination is afoot. But I’d be careful about reading the tea leaves on this one. Cohen may have a lot less control over this process than you think. And there’s not a clear statement on any of this.

      For starters, the earlier discussion was about combining Red and Google Play. Now, Red isn’t even part of this newer discussion.

      So let’s see.

      • coolio

        Yo Paul, also, doesn’t it sound stupid to try to get a whole new deal for catalogs when you already have it all on google play music.

        • coolio

          In the (semi) distant future though, if YouTube Remix outperforms drastically google play music, I see gpm going down. Maybe like that

  2. Vail, CO

    Just hard to take YouTube’s leadership seriously. Robert
    Kyncl goes around telling heartwarming stories about how YouTube is changing the world and making it a happy place. He’s telling stories created by Google PR people about how YouTube saved a small town through some knitting channel (not kidding you), meanwhile his site is infested with ISIS and white supremacy videos.

    Then Cohen is talking about $3 CPMs and building a bridge with the music industry that hates him. And cashing a $650,000 salary.