Seeking Alpha

Pandora (P) -3.6% AH following reports Google (GOOG) will launch subscription-based music...

Pandora (P) -3.6% AH following reports Google (GOOG) will launch subscription-based music services - a Spotify-like service, and a YouTube music video service - with at least the former service launching tomorrow. Neither appears to directly compete with Pandora's ad-supported online radio service (which thus far hasn't been hurt badly by Spotify's growth), particularly given an NYT report stating the Spotify-like service won't include a free tier. However, the YouTube service would be a unique market entry, one backed by a site with enormous reach. It would need an audio-only option to keep a lid on battery drain and mobile data usage; a WSJ report suggests Google is looking to offer one.
Comments (6)
  • The forthcoming YouTube music service, separate from Google music subscription, will be free to consumer and target mobile. It will offer relatively unlimited, on-demand streaming with playlisting and sharing functionality; adding recommendation to provide a programmed listening experience would not be a big deal. Commentators believe YT music will be highly competitive to P; in fact, with P implementing a mobile listening cap, why would consumers not turn to such a service, with a vastly superior feature set?


    "While a Google Play music product could be big, the one music industry execs are most excited by is the one tied to YouTube. The new YouTube product would be designed for the desktop and mobile devices, according to a person familiar with the negotiations between Google and the major labels. Such a mobile offering, coupled with the powerful YouTube brand, could ignite the emerging streaming-music business, now led by Spotify for on-demand music and Pandora for Internet radio. If YouTube gets the rights to offer a powerful free streaming service on smartphones, it could be a game changer for music streaming."
    14 May 2013, 08:24 PM Reply Like
  • I think the YouTube service is intriguing (particularly if audio-only is an option), but I'm not seeing anything in the link calling it free. The author simply says a free YouTube service would be a big deal. Everything I've read suggests it'll be a subscription service (makes sense, since studios and artists already make plenty off ad-supported YouTube/Vevo videos).
    14 May 2013, 09:21 PM Reply Like
  • The Google music service to be announced tomorrow will be subscription but the separate, forthcoming YouTube Music service will be a music-focused extension of their existing ad-supported video service, but enabled for mobile and with an audio-only mode. (Right now the labels largely block YT user generated/uploaded content with music for mobile. Since labels only make music videos for a tiny fraction of their repertoire--maybe 2-3%--this means that the vast majority of their music content isn't now legally accessible on mobile.) An earlier article by the author linked to in the recent one I cited indicates that a free tier will be available: "YouTube music for mobile would include a combination of free offerings and subscription plans, sources said."
    14 May 2013, 09:54 PM Reply Like
  • Thanks for the link. It's a couple months old, but does suggest a free service could be in the cards.


    I'm pretty sure a lot more than 2%-3% of music video content is now on YouTube, particularly when weighted for popularity. Aside from the stuff posted by the studios themselves, a lot of videos are monetized via ContentID.

    15 May 2013, 10:28 AM Reply Like
  • Thanks for the engagement here. Rwo things.


    On the link, it's an older story from the same author as the more recent one linked, indicating that sources previously told him about the free tier, which is the basis for his current assumption.


    My point about % is about mobile. While many label-produced "official" music videos are available on mobile, the labels only make official videos for a small percentage of the total tracks released, maybe 2-3%. Label deals give them explicit, broad rights to hold back content for mobile, especially user-uploaded music content, which they exercise to varying degrees, some quite aggressively. (Your link to an explanation of content ID is identifying the means by which UGC is both monetized and blocked.) So that's why YT getting restrictions relaxed for UGC on mobile is so important. That's how YouTube music will become the world's largest cloud jukebox for the connected, portable devices that are relied upon by consumers for music consumption.
    15 May 2013, 11:10 AM Reply Like
  • Or two things!
    15 May 2013, 11:40 AM Reply Like
DJIA (DIA) S&P 500 (SPY)