Things are never slow in the world of Google. From Google Glass to this new music subscription service, Google always has plenty of new things hitting the marketplace.
The word is that Google is promoting a YouTube subscription service that will have no ads, and will be tied to its audio service, which is planned to work somewhat like Spotify. According to an inside executive, the search giant is putting deals in place with several big record labels for the new audio subscription service.
But as of now, there are disagreements on just how Google should pay back the labels for the YouTube aspect of the subscription.
Google apparently did agree to pay a minimum per stream price for the audio service, as Spotify does. But it only wants to pay on the basis of revenue share for the YouTube aspect. The record labels see it differently: They want both aspects of the new service to have a per stream rate.
As we reported earlier this week, YouTube is almost ready to unveil a subscription fee for some channels. It is believed YouTube intends to charge $2 per month per channel for approximately 50 channels. It sounds like a launch is just around the corner.
YouTube has stated that it wants to offer some of its content partners the option of having subscription channels. However, it is believed that these individual channels will be separate from the YouTube aspect of the Google music service.
Billboard has reported that the revenue share that YouTube is offering to channel partners is under 30%. If this is about what it is offering record labels for the subscription services, it makes sense that the labels don’t like it. Spotify and iTunes pay about 70% of their revenues to the rights holders of the music. The chance of an agreement could key upon just how much Google wants to pay for advances in major labels.
We can’t say if the new Google audio service can compete with Spotify, but if you bundle it with an ad-free YouTube, we could see how it might work.