March 06, 2013, 8:30 AM —
There was a lot of buzz yesterday surrounding a piece over at Fortune that talked about a new subscription-based YouTube music streaming service that will launch later this year. Fortune claims they were "briefed on the service by sources in the record industry and at Google who declined to be named."
Does anyone else think these music streaming services are in a race to the bottom? It seems like, generally, we're moving to more and more generous free tiers from providers like Spotify, Soundcloud, Rdio and the like. I know plenty of people who use streaming services but not a lot who actually pay for them. It doesn't seem like adding more competition to this space would help anyone other than consumers.
In fact Pandora recently bucked the trend towards "more for free" by putting a 40 hour/month cap on the amount of music you can listen to for free on mobile devices. When I asked a few friends what they'd do if they hit the cap, they told me they'd just jump to another free service, or even create a second Pandora account. Granted this is purely anecdotal and a very small sample, but no one seemed of a mind to pay for a sub to get around that 40 hour limit.
The Fortune piece includes some interesting facts: most of YouTube's top-viewed videos are music, and
Most tellingly, according to a Nielsen "Music 360" report from 2012, a startling 64% of teenagers prefer YouTube over any other music listening and discovery engine.
This info floored me, as I'm not a huge fan of YouTube. I find it a mess to navigate and more often than not, during the evening I still struggle with stuttering, buffering video in spite of a 30 mbps connection. I can't even begin to imagine dealing with using YouTube as a music service but hey, that's the difference between us cranky old guys and today's youth.
But if YouTube is already such a successful music venture, why change things? I don't see a reason.
Neither does VentureBeat's Tom Cheredar who responded to the Fortune piece with his own theory: that YouTube will allow individual artists to sell a subscription to their content. Rather than one comprehensive "all you can eat" monthly sub, artists will be able to use this service to set their own monthly subscription fee for ad-free access to their content.
Cheredar bases his theory, at least in part, on an official response to the rumor from Google:
“While we don’t comment on rumor or speculation, there are some content creators that think they would benefit from a subscription revenue stream in addition to ads, so we’re looking at that.”
This kind of service would provide another option for content creators without any wholesale disruption of the ad revenue Google currently gets from all those teenagers using YouTube as their source for free music.
So yeah, I'm putting my money on VentureBeat's theory this time around. How about you?
Read more of Peter Smith's TechnoFile blog and follow the latest IT news at ITworld. Follow Peter on Twitter at @pasmith. For the latest IT news, analysis and how-tos, follow ITworld on Twitter and Facebook.