Unlocking YouTube How YouTube’s Music Key Will Impact Subscriptions
The 20,000 Foot View
YouTube is the globe’s leading digital music service but it delivers comparatively little back to the music industry in direct revenue. Even the one billion dollars paid out in Content ID revenues only represents for each of its one billion users per year, since the launch of Content ID in 2007. Now YouTube is poised to launch its long anticipated subscription service, Music Key. It should prove to be among the most compelling music product offerings in the marketplace, yet YouTube’s net impact on the subscriptions’ sector will still be net negative with its free tier sucking the oxygen from its premium competitors.
- Only of YouTube’s monthly music video users watch more than three music videos a month, representing of all of Vevo music viewers account for of video streams, while account for just music video audience has a youngish skew – are aged under – but there is also strong representation across all age of consumers would pay for a YouTube music subscription of consumers say they have no need to pay for any subscription because they get all they need for free from YouTube
- Even if YouTube’s Music Key acquired million subscribers in its first year, its net revenue impact on the global subscription service would be minus billion
- YouTube’s Music Key could also leave a gaping hole in Vevo’s ad revenue business, by converting many of Vevo’s most active users
- Record labels need to reassess YouTube’s market role, because the promotional platform is becoming the end product itself for most viewers
Companies mentioned in this report: Google, YouTube, Vevo, Spotify, Soundcloud, Grooveshark