YouTube Introduces Premium Subscription Service

YouTube Music Key Shifts Focus Away From Video

There are two ways internet business can make money these days. The first, and oldest, is adverts. A popular app or website is valuable because lots of people are looking at it, and plenty of companies will pay to have some of those eyes on them. The second way is through subscription: pay a certain amount per month for access to content. The biggest examples of the latter are services like Spotify and Netflix, although we are now seeing traditional media outlets like newspapers move their content online and shift to a subscription-based service.

Google made a little over $50 billion last year through advertising revenue, so clearly that model is still a viable one for the company. Increasingly, however, the profitability of advertising is becoming less and less apparent. People are becoming immune to internet advertising, and so it is the second method of subscription which is gaining more traction.

This, perhaps, is the rationale between the latest move from Google-owned YouTube. The video hosting site is set to launch a service called YouTube Music Key alongside a rebranding of Google Play Music All Access to Google Play Music Key. For $9.99 a month users will gain access to both features, which in the case of YouTube means ad-free music, audio-only playback for off-screen listening (currently you cannot listen to a video’s audio with your phone screen locked), and offline playback. This comes alongside membership to the Spotify-esque Google Play Music Key.

Subscribers will also gain access to exclusive remixes, concert footage, and cover versions, although considering the vast array of similar user-uploaded content already on the site it would have to be something pretty special to act as a real incentive.

The development is an expected one, and perhaps even somewhat overdue. A survey conducted in 2012 showed that two-thirds of teenagers listen to music almost exclusively through YouTube, and its power to influence musical trends has long been recognised. Not since the golden days of MTV has the music video held such sway over popular culture, with artists like Macklemore & Ryan Lewis and Korean pop act Psy gaining huge popularity through the video streaming site.

Google’s introduction in 2010 of adverts playing before videos was a huge revenue increase for the site, despite predictable backlash from the public. It’s difficult to get a good grasp on just how much YouTube earns for Google, since the company doesn’t break down their profits, but estimates put the video site’s ad revenue at around $5.6 billion last year. Regardless of how accurate this is, it’s certain that the site has paid its original $1.6 billion price back many times over.

YouTube has been making the steady shift towards recognising its own value as a music streaming service for some time now. Following the site’s redesign in 2010 it now features a pretty competent playlist system for artists based on users’ watching habits, and the substantial presence which record labels have built there gives it greater legitimacy and may smooth the ever-worrisome copyright issues.

Douglas Clarke-Williams

Douglas is an English Literature graduate who has written about everything from music to food to theatre, now a content creator for Social Media Frontiers. No topic too large or too small. Follow him @DouglasAtSMF.

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