YouTube's new music streaming service has some obstacles to overcome (GOOG, GOOGL)

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December 11, 2017 4:32 PM

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YouTube plans to launch a new music streaming subscription service, internally dubbed "Remix," in March 2018, Bloombergreports.

The service, YouTube's latest foray in the music streaming space, will include on-demand streaming capabilities, similar to Spotify's, and offer video clips.

Warner Music Group, one of the world’s three largest record labels, has already signed a deal with YouTube for Remix. And YouTube is in talks with the other two major record labels — Sony Music Entertainment and Universal Music Group — as well as with independent labels, about procuring their music libraries for the service. Additionally, YouTube could structure royalties based on the licensing agreements other streaming services, like Spotify and Apple Music, have with the record labels.

A new music streaming service makes sense for YouTube for several reasons:

It has a sizable user base to draw from.
YouTube’s music catalog is unique.
Music is one of the most popular types of content on YouTube.
VAB
YouTube will be able to strengthen its relationships with record labels.
The Guardian

Nonetheless, the company’s planned music streaming service will have obstacles to overcome:

Google could struggle to differentiate Remix from its existing music streaming services.
Google is going up against established players with large subscriber bases.
hasn’t
Users may opt to view music videos on YouTube for free instead.

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