YouTube Building Spotify Streaming Competitor: Report

YouTube.

YouTube is building a Spotify competitor, according to a new report in Billboard.

The music publication drew its information about the on-demand streaming music service from unnamed sources “familiar with the plans.” Those plans apparently include free and “premium” tiers, the latter of which will feature no ads and the ability to listen to music offline.

YouTube declined to comment on its future plans.

If a YouTube-branded streaming service is indeed in the works, Google (its parent company) will need to figure out how that platform meshes—or even competes—with Google Play Music All Access, a $7.99 service that allows Google customers to listen to an unlimited number of songs and create custom radio stations.

A YouTube streaming service would also find itself competing against Spotify, Pandora, and other streaming services currently popular on the market. If that wasn’t enough, Apple is leveraging its massive ecosystem to promote iTunes Radio, which features streaming radio stations.

At the same time, YouTube would come to the table with several key advantages. In contrast to other music startups desperately scrambling for recognition and market-share, it’s a well-established brand with millions of daily users; if even a relatively small percentage of those people end up paying for the music service, it could result in significant revenue. Second (and related), YouTube already has a massive source of revenue in the form of ads, which could give the music channel more time to develop into a success, in contrast to those streaming hubs that must grow rapidly or implode. Third, Google has a lot of engineering talent and music-industry contacts at its disposal—it doesn’t need to struggle to lock down music deals from scratch or build a deep in-house talent pool.

But that doesn’t mean a YouTube streaming service would automatically prove a success. Without easy access to the hub from YouTube’s homepage and mobile app—and that means a single click, not two or three—the effort could wither and die. Without a significant and effective marketing campaign to cut through all the noise out there, the effort could wither and die. And without some sort of unique functionality or exclusive content to make the service stand out, the effort could wither and die. No pressure.

 

Image: YouTube