The dark horse of music streaming from YouTube: a potential killer of Spotify or another stillborn project ...
In March this year, the appearance of a new paid music streaming service from YouTube is expected. According to Bloomberg, the service has the working title Remix. With high probability, this project will qualify for a piece of cake, which today is almost completely divided Apple Music and Spotify, and in the Russian segment of the network also Yandex.Music.
It seems strange to me that Google’s desire even more (after GooglePlay Music) to squeeze into this cramped market, given that the existing services cover almost all the needs of the target audience ready to pay for music online. To understand what a new project from YouTube can count on, it makes sense to consider everything that is known about it, as well as to assess the situation that has developed in the market to the current moment.
From the scant information provided by bloomberg with reference to its sources on YouTube, it becomes clear that the interests of the major record companies are behind the new service with paid music. The situation is similar with the global competitors of the new service (Apple Music, Spotify).
It is noted that Warner Music Group has already signed a contract to use the service. In addition, it is known that at the end of last year, negotiations were actively conducted with Sony Music Entertainment and the Universal Music Group, and Merlin.
Bloomberg also stressed that YouTube decided to launch the service as a measure of social responsibility to the music industry. The latter lost a lot of money due to the free access to music content on YouTube.
Probably, the service will remind many spotify, while maintaining the key YouTube advantage - the ability to view the video. It was also reported that to promote the new service, YouTube plans to actively use well-known artists. Such an approach is tried and true, and often win-win.
Many people associate an ambitious video hosting project with the appearance of former Warner Music CEO Lyr Cohen, who is well acquainted with this market, in the YouTube top managers team.
Spotify has been the market leader for several years now. So, in August last year, the number of paid subscribers of the service was estimated at 60 million, which is twice as high as the same figure as Apple Music.
Despite this, Apple Music is leading in terms of the number of unique users. Thanks to a three-month free subscription, apple service outperformed its competitor, according to an authoritative assessment of Verto. Apple Music in March 2017 had 40.7 million unique users per month, while Spotify had only 30.4 million people (this was the third figure after Apple and Pandora).
The situation with payments to owners is also interesting. In 2016, the RIAA provided data on deductions to music authors. According to these statistics, Apple Music listed from $ 12 to 15, Spotify - $ 7, YouTube only $ 1 for 1000 plays.
Today the situation is not much different from the 16th year. But it is likely that after launching “Remix”, YouTube contributions will become much more. Details of the RIAA data can be found here .
Existing services today are developing differently depending on the region of the planet. In this regard, demonstrative statistics growth rate.
So, in the US, the monthly growth of Apple Music is 5%, while the Spotify does not exceed 2%. In the EU, the situation is exactly the opposite, and the growth of apple service is inferior to the Swedish competitor.
If Apple succeeds in overtaking Spotify in the United States, the likelihood of significant changes in the global picture is not excluded, but this should not be expected before 2019. Moreover, given the emergence of a service from YouTube, any predictions are still premature.
If you do not take into account the fact that Russian users do not like to pay for music, we can talk about some prospects for the development of paid streaming. In today's Russian realities, almost no tilled field of paid music services, almost everyone has a chance to dominate.
Considering that Spotify was not officially launched in Russia, Apple Music is the formal leader. The cost of his paid subscription is 169 rubles (family - 269 rubles, if you have family access to iCloud). For students who confirmed their status through UNiDAYS, an almost free subscription is available for 75 rubles per month.
The price of a paid Yandex.Music service is equal to the cost of an Apple Music subscription - 169 rubles per month. It is also possible to purchase an annual package for 1690 rubles. For this money, Yandex offers to listen to music without ads and with a bit rate of 320 Kbps. The web version of Yandex.Music is free, which nurtures a loyal audience. Meanwhile, the number of paid subscribers is not yet compared with the global giants and is only about 250,000 users.
Spotify, which has not been launched in the Russian Federation, has a number of users there. Music lovers from Russia just use VPN and successfully disguise themselves as Americans, British or Australians.
A paid subscription for US costs $ 9.99 for sole use and $ 14.99 for family use. The cheapest access to the Swedish music library is for Filipinos, the price of an individual subscription is $ 2.93 per month.
The launch of a new service from YouTube in Russia can be fraught with a number of restrictions that will be extremely unusual for Russian users of video hosting.
Most likely, it will become much more difficult to listen to music on YouTube, the audio content that belongs to the copyright holders will be cut much more carefully and much more often. It is quite natural that these innovations will not add to the popularity of either a new service, or YouTube, or Google as a whole.
There are 3 scenarios, given the existing input data. The first one assumes that YouTube will accomplish the impossible and be able to offer a service that will surpass the existing leaders. At the same time, it will be able to cajole copyright holders more than Apple and listeners more than Spotify. In this scenario, the service can grow to the undisputed market leader in 1.5-2 years. But for this, I stress once again, a revolution is needed, which is hardly possible.
The second scenario - assumes equal opportunities of services and very impressive investments from YouTube. These investments, together with the support of world labels, will allow the new service to squeeze between Apple Music, Spotify, Pandora and some Sound Cloud, occupying its localized niche. With this scenario, YouTube will be long and hard to fight for the market, which will be similar to the protracted positional battles of the First World War.
The third scenario is the one that happens on a regular basis with some ambitious Google projects (if someone forgot, they own YouTube). The situation will develop not at all in favor of the service and will lead to its quick death due to dampness and underfilling. It is also possible to minimize the project until the moment when an astronomical amount of money has been entered into its promotion.
In my opinion, the second scenario is most likely, if, of course, the promises of Bloomberg are correct and the launch of the service is not postponed indefinitely. Let me remind you that YouTube has not officially announced this anywhere. As a conclusion, I propose to share your thoughts about the prospects of the service in the comments.
It seems strange to me that Google’s desire even more (after GooglePlay Music) to squeeze into this cramped market, given that the existing services cover almost all the needs of the target audience ready to pay for music online. To understand what a new project from YouTube can count on, it makes sense to consider everything that is known about it, as well as to assess the situation that has developed in the market to the current moment.
Key features of the new project
From the scant information provided by bloomberg with reference to its sources on YouTube, it becomes clear that the interests of the major record companies are behind the new service with paid music. The situation is similar with the global competitors of the new service (Apple Music, Spotify).
It is noted that Warner Music Group has already signed a contract to use the service. In addition, it is known that at the end of last year, negotiations were actively conducted with Sony Music Entertainment and the Universal Music Group, and Merlin.
Bloomberg also stressed that YouTube decided to launch the service as a measure of social responsibility to the music industry. The latter lost a lot of money due to the free access to music content on YouTube.
Probably, the service will remind many spotify, while maintaining the key YouTube advantage - the ability to view the video. It was also reported that to promote the new service, YouTube plans to actively use well-known artists. Such an approach is tried and true, and often win-win.
Many people associate an ambitious video hosting project with the appearance of former Warner Music CEO Lyr Cohen, who is well acquainted with this market, in the YouTube top managers team.
Current state of affairs
Spotify has been the market leader for several years now. So, in August last year, the number of paid subscribers of the service was estimated at 60 million, which is twice as high as the same figure as Apple Music.
Despite this, Apple Music is leading in terms of the number of unique users. Thanks to a three-month free subscription, apple service outperformed its competitor, according to an authoritative assessment of Verto. Apple Music in March 2017 had 40.7 million unique users per month, while Spotify had only 30.4 million people (this was the third figure after Apple and Pandora).
The situation with payments to owners is also interesting. In 2016, the RIAA provided data on deductions to music authors. According to these statistics, Apple Music listed from $ 12 to 15, Spotify - $ 7, YouTube only $ 1 for 1000 plays.
Today the situation is not much different from the 16th year. But it is likely that after launching “Remix”, YouTube contributions will become much more. Details of the RIAA data can be found here .
Growth paradoxes
Existing services today are developing differently depending on the region of the planet. In this regard, demonstrative statistics growth rate.
So, in the US, the monthly growth of Apple Music is 5%, while the Spotify does not exceed 2%. In the EU, the situation is exactly the opposite, and the growth of apple service is inferior to the Swedish competitor.
If Apple succeeds in overtaking Spotify in the United States, the likelihood of significant changes in the global picture is not excluded, but this should not be expected before 2019. Moreover, given the emergence of a service from YouTube, any predictions are still premature.
Features of the market in Russia
If you do not take into account the fact that Russian users do not like to pay for music, we can talk about some prospects for the development of paid streaming. In today's Russian realities, almost no tilled field of paid music services, almost everyone has a chance to dominate.
Considering that Spotify was not officially launched in Russia, Apple Music is the formal leader. The cost of his paid subscription is 169 rubles (family - 269 rubles, if you have family access to iCloud). For students who confirmed their status through UNiDAYS, an almost free subscription is available for 75 rubles per month.
The price of a paid Yandex.Music service is equal to the cost of an Apple Music subscription - 169 rubles per month. It is also possible to purchase an annual package for 1690 rubles. For this money, Yandex offers to listen to music without ads and with a bit rate of 320 Kbps. The web version of Yandex.Music is free, which nurtures a loyal audience. Meanwhile, the number of paid subscribers is not yet compared with the global giants and is only about 250,000 users.
Spotify, which has not been launched in the Russian Federation, has a number of users there. Music lovers from Russia just use VPN and successfully disguise themselves as Americans, British or Australians.
A paid subscription for US costs $ 9.99 for sole use and $ 14.99 for family use. The cheapest access to the Swedish music library is for Filipinos, the price of an individual subscription is $ 2.93 per month.
The launch of a new service from YouTube in Russia can be fraught with a number of restrictions that will be extremely unusual for Russian users of video hosting.
Most likely, it will become much more difficult to listen to music on YouTube, the audio content that belongs to the copyright holders will be cut much more carefully and much more often. It is quite natural that these innovations will not add to the popularity of either a new service, or YouTube, or Google as a whole.
How the market will change after the appearance of music streaming from YouTube
There are 3 scenarios, given the existing input data. The first one assumes that YouTube will accomplish the impossible and be able to offer a service that will surpass the existing leaders. At the same time, it will be able to cajole copyright holders more than Apple and listeners more than Spotify. In this scenario, the service can grow to the undisputed market leader in 1.5-2 years. But for this, I stress once again, a revolution is needed, which is hardly possible.
The second scenario - assumes equal opportunities of services and very impressive investments from YouTube. These investments, together with the support of world labels, will allow the new service to squeeze between Apple Music, Spotify, Pandora and some Sound Cloud, occupying its localized niche. With this scenario, YouTube will be long and hard to fight for the market, which will be similar to the protracted positional battles of the First World War.
The third scenario is the one that happens on a regular basis with some ambitious Google projects (if someone forgot, they own YouTube). The situation will develop not at all in favor of the service and will lead to its quick death due to dampness and underfilling. It is also possible to minimize the project until the moment when an astronomical amount of money has been entered into its promotion.
In my opinion, the second scenario is most likely, if, of course, the promises of Bloomberg are correct and the launch of the service is not postponed indefinitely. Let me remind you that YouTube has not officially announced this anywhere. As a conclusion, I propose to share your thoughts about the prospects of the service in the comments.
Source: https://habr.com/ru/post/410513/