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. 

Key Findings

• Only            of            monthly music video users watch            than three music videos a            representing            of all consumers 
           of Vevo music viewers account for            of video streams, while            account for just           
• YouTube’s music            audience has a youngish skew                       are aged under            – but            is also strong representation across            age groups
           of consumers would pay for a YouTube music subscription service             of consumers say they have no need to pay for any subscription because they get all they need for free from YouTube
• Even if            Music Key acquired            million subscribers            its first year, its net            impact on the global subscription            would be minus            billion
• YouTube’s Music            could also leave a gaping            in Vevo’s ad revenue business,            converting many of Vevo’s most            users
• Record labels            to reassess YouTube’s market role,            the promotional platform is becoming            end product itself for most           

Companies mentioned in this report: Google, YouTube, Vevo, Spotify, Soundcloud, Grooveshark