Labels representing 95% of the music industry have signed up for YouTube's (GOOG -0.2%) long-rumored subscription music service, says exec Robert Kyncl. However, the holdouts (largely indie labels) will see their content blocked from YouTube, ostensibly to preserve a good user experience for subscribers.
YouTube will start internally testing the service in the coming days, before doing a full launch later this summer.
Though the subscription music market is intensely competitive - Spotify dominates, and Apple is about to join the fray - YouTube's huge reach (1B+ monthly users), together with its ability to pair ad-free music videos and audio-only streaming, give it a good chance to fare better than Google's not-too-popular All Access music service (launched last year).
Impala, a trade group representing indie labels, is complaining to the EU about Google's move. Meanwhile, one label chief says his problem with YouTube wasn't its subscription licensing terms, but free tier enhancements he fears will lower subscriptions for services such as Spotify.