YouTube's music ambitions might actually work this time

  • Google's YouTube Music ambitions might work this time.
  • People already go to YouTube to listen to music and watch videos.
  • Google just needs to clean up its product offering, which is too confusing for consumers.
Lyor Cohen speaks onstage at the Music Keynote during SXSW at Austin Convention Center on March 14, 2018 in Austin, Texas.
Sean Mathis | Getty Images
Lyor Cohen speaks onstage at the Music Keynote during SXSW at Austin Convention Center on March 14, 2018 in Austin, Texas.

YouTube's move to create its own streaming music service — despite a competitive product from its own company through Google Play Music — might not be as big of a headscratcher as one might at first think.

The company announced on Thursday it will launch YouTube Premium, which will not have ads, on May 22 for $9.99 a month. It will also offer a free ad-supported music service called YouTube Music and YouTube Music Premium for $11.99 per month.

Google is already in the streaming music market with Google Play Music and an older version of YouTube Music.

Here's why this time the attempt might work.

YouTube is already a go-to destination for music

YouTube's viewers already use it for music in large numbers. That means it won't face the challenges of getting users to think of it as a "music service." They already do.

In fact, the International Federation of the Phonographic Industry said in September that 46 percent of all time spent listening to on-demand music is on YouTube. It also found 85 percent of YouTube users used the platform to stream music in the last month.

YouTube has tons of music videos

Many of YouTube's popular videos are hosted by Vevo, a joint venture between Universal Music Group, Sony Music Entertainment and Warner Music Group. In 2017, Vevo racked up 300 billion views and increased its revenue to $650 million, according to the Financial Times. The $500 million revenue increase in one year was mostly due to higher ad revenue fees from YouTube.

It knows how to make money off music

The company has been touting its music viewership numbers, especially as a way to prove it has brand-safe content to advertise on. During a recent advertiser presentation in New York, it announced it would allow companies to buy ads on any music content. The free YouTube Music service seems to fit in nicely with these plans.

It has money to throw at the wall

Google's parent company Alphabet, which includes YouTube as part of Google's business unit, said it had a free cash flow of $4.34 billion during its latest quarterly report in April. That means there's plenty of money for Google to experiment.

It also probably explains why Google has attempted this before, with existing products such as Google Play Music and the current YouTube Music app.


Spotify and Apple Music are simple to understand — you go there for music — which is probably why they're so attractive to customers. Google's products can be more complicated.

When the new services roll out, it will offer the following products: YouTube, YouTube Premium, Google Play Music, YouTube Music, and YouTube Music Premium. Toss in its digital TV replacement YouTube TV and things get even more confusing for the everyday consumer.

Google needs to lay this out better for consumers. One strategy might be to kill Google Play Music. Then consumers will begin to realize that YouTube Music is the go-to Google service — and is the company's answer to Spotify, Apple Music and Pandora.

Google has the foundation to succeed in the space, it just needs to clean up its messaging.