Three reasons why YouTube Music Key will succeed (and three reasons it won’t)

youtube music key screenshot 01It has been nearly a year since the rumor broke that Google would create a subscription music plan for YouTube. The rumor was confirmed this spring and summer with ongoing publicized negotiations with record labels. The clearest picture we now have of the service features and name (YouTube Music Key) comes from Android Police, which published leaked screenshots of mobile screens showing service functions.

During this long (and continuing) lead-up, speculation and bafflement has been rampant. Consider these facts:

  • YouTube is the world’s most populated online audio platform, with over one-billion users
  • YouTube is an important music-discovery environment, especially in young demographics
  • YouTube content is licensed, with an automated Content ID system that flags unauthorized uses

In other words, pundits say while scratching their heads, YouTube is already a titanic success — what can be gained by upending its simplicity with an alternate model?

The upside

The potential upside to Google’s venture is a quick and possibly dominating footprint in the subscription music category. If Google can convert one percent of YouTube’s non-paying users, it will match Spotify’s global base of 10-million subscribers — while still enjoying the ad-supported on-demand side of classic YouTube. (Glenn Peoples has a more sophisticated speculation in Billboard.)

In addition, Google hopes to bolster its existing service, All Access, by combining it with YouTube Music Key in some fashion (according to Android Police).

Why YouTube Music Key will succeed

Here are three reasons why the Music Key plan will succeed in the crowded music-service market:


There is nothing unusual in a subscription plan that removes commcercials. In fact, that is one standard benefit of signing up for monthly payments in on-demand services like Spotify, and radio services like Pandora.

But YouTube ads are different and much more disruptive to the content. Unlike Spotify, Pandora, and others, YouTube ads are not placed as occasional interruptions in a playlist. Instead, they are track-specific.

So, it is possible, perhaps even likely, to create a YouTube Favorites music playlist, each track of which contains a pre-roll commercial. Some of the advertisements are two, three, five, or 15 minutes long. Talk about ad load — YouTube can make terrestrial radio sound non-commercial.

It is fair to say that advertisements are ruinous to the YouTube experience, for some portion of the YouTube population. For those people (how many, is the question), subscribing to YouTube Music Key will be a cleaner and more compelling value proposition than subscribing to Spotify or Pandora.

Stripping out the video

Another (uncomfirmed) facet of YouTube Music Key is the optional removal of the video portion of music tracks, leaving the audio. This part of the plan is a sensible (probably essential) feature.

Video is a sometimes a desirable part of the experience, especially with concert uploads. But much user-contributed content — especially whole albums, but also many single tracks — is accompanied visually by a static image, just to have something in the video shell. In those cases, the video becomes an undesirable bandwidth hog that would slow down the service in mobile situations.

Stripping video would challenge ripping apps that do the job now for many YouTube addicts.

Oh, that catalog

The YouTube music library is astonishing. It can be compared to Wikipedia in its scope (monumental) and sourcing strategy (the crowd). In music, there is nothing like it in the world. Last December, when Spotify bragged of gaining exclusing access to Led Zeppelin’s discography, it ignored Zeppelin’s jaw-dropping presence on YouTube, which makes the official discography look like table stakes.

Here’s another example, illustrating the advantage of licensed crowd-sourcing. Ed Sheeeran’s track “I See Fire” was remixed by Kygo (Kyrre Gørvell-Dahll, a Norwegian producer), and is an online hit. that is, it’s a hit if you can find it, which is the two major crowd-sourced platforms, YouTube and SoundCloud. It has enjoyed over 40-million YouTube plays, and 13-million SoundCloud spins. The track does not exist in Rhapsody, Rdio, or Spotify. Music-ID app SoundHound does not recognize it. (Competitor Shazam does ID the track.)

The point is that YouTube’s crowdsourced catalog puts the library in the users’ hands. Niche categories like classical and jazz are nearly unbelievable troves of music carefully uploaded and packaged by passionate hobbyists.

As a single point, YouTube’s catalog might not be enough to lure existing users through the paywall. But in combination with the ad-free and non-video attractions, it is a strong motivator.

Why YouTube Music Key won’t succeed

Here are three obstacles to success.

Paying for a free thing

This is the most obvious objection, from industry observers and probably from users, too. YouTube is already one of the most important creations of the digitally connected era in which we live. It is free. What incentive could possibly overcome the immense built-in value of the brand?

Paying for video

This is different. YouTube has scaled into the most important provider of online video content by imbuing a deep understanding in the consumer mindpsace that video is free. (Movies and TV shows aren’t included in this axiom.) So there might be double resistance — first, to paying for YouTube when YouTube is already free, and second, to the concept of paying for videos at all.

In this regard, YouTube might operate at a disadvantage to music services, which trade on a consumer understanding (altered and diminished as it may be) that music is historically a paid-for product.

Going against trend

Or, a couple of trends.

First, there is the fact that free streaming is far more accepted and adopted than paid streaming. (It is 4-to-1 for Spotify, and about 30-to-1 for Pandora.) So Google’s attempts to raise its subscription-music business is probably a heavy lift.

Second, a general devaluation of recorded music is in progress, severely disrupting the record industry. In that context up-selling consumers from a mass-market service to a premium service could be difficult, for reasons more about perceived value than actual value.


It’s going to be one heck of an experiment. We can’t wait to try it.

Brad Hill


    • Thanks for the comment Buddy. YouTube Music Key will be a subscription service, not a free one. Classic YouTube is free, of course (ad-supported), and has *created* the market which Music Key will try to exploit. In both cases money flows through, from different sources, to rights-holders.

  1. Why don’t they adopt a sort of hybrid model where subscriptions would allow for removal of ads and higher rates of monetization, while the free version (free for all viewers) would involve the uploader paying a fee for each upload, which could then potentially be reimbursed from ads?

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