YouTube Expands Paid Subscriptions, Streaming Music Next


Among younger listeners, more people get their music from YouTube than any other source. We’re not surprised to see YouTube diving headfirst into redefining the business of music, but it is an exciting development nonetheless.

The first news to drop was that YouTube has expanded its paid channel subscription pilot program to all channels with over 10,000 subscribers. That expansion means the pilot program is working, generating a significant new revenue stream for content creators.

While you and I may not have 10K subscribers, plenty of mid- to large-sized musicians do, and we’d expect and encourage many of them to begin experimenting with these subscription-based YouTube channels. Starting at $0.99/mo., we see a wide-open market for subscription-based music patronage, as fans look to support their favorite acts and be the first to view and share their exclusive content. We reported recently on a band called Rabbit Rabbit that’s successfully pioneering a subscription-based exclusive monthly content club for its fans, and only see the trend growing.

Shortly after the paid subscription pilot news dropped, we got word of even bigger news: YouTube is indeed building a much-rumored on-demand streaming music service, powered by the new Google Play All Access streaming music service.

Google and Apple are now competing directly with industry heavyweights like Spotify and Pandora, and it’s hard to see how they don’t win in the long term. Both are enormously powerful companies compared to the profit-challenged Spotify and Pandora.

Meanwhile, it’s nice to see Google finally throwing some subscription revenue to artists. We expect streaming royalties to be a game of “collect the pennies”, making the subscription fees even more important. Meager streaming royalties will likely continue to pale in comparison to the value of making new fans for life and collecting value in other ways.

With the heavyweight presence of Google and Apple in the market, we may soon be collecting our pennies from a handful of streaming juggernauts instead of the dozens of separate music providers that keep distribution aggregators like TuneCore, CDBaby and OneRPM in business.