YouTube’s latest venture, its music service has gained over 50 million paid subscribers recently. Though the service had been criticized by record labels and music companies previously for availing their music to the global audience for free, it continued to thrive.
The 50 million paid subscribers are from both YouTube Music and YouTube premium. The company has not revealed the details like how much revenue they have earned or the average price that the consumers paid.
YouTube’s music service began in June 2018 and is swiftly becoming the biggest paid music service in the world. It currently holds nearly 8% of the total world’s subscribers. Spotify is on top of the list.
Alphabet is YouTube’s parent company. YouTube currently earns $7 billion in advertisement sales, 84% more than last year. YouTube’s global head of music, Lyor Cohen said that both the non-paying and paid subscribers are important for business. The hiring of Lyor Cohen five years ago was not welcomed by the industry.
YouTube has long been bashed by the music industry for offering free music to the audience. They have been blaming the internet for the continuous 15-year decline in sales. They have always said that YouTube could create a huge subscription-based business for music. Until recent years, YouTube had always put its focus on its advertisement business.
YouTube is the biggest video-sharing platform in the world. It always had the potential to become a promotional tool for artists. Even the most popular artists in the world release their music videos on the site to go viral. Cohen has utilized that potential and builds a new platform that allows both the artists and the listeners to explore new features. Cohen explains that YouTube is not only supposed to make people famous but offer them financial gain as well.
Cohen revealed that he was encouraged to bring a change in Google and YouTube with the support of YouTube’s chief business officer, Robert Kyncl, and YouTube’s chief executive officer, Susan Wojcicki.
In order to start the new service, YouTube began signing deals with the biggest music rightsholders from 2017 to 2018. YouTube Music did not become popular overnight. It lacked the resources to do the business properly at that time.
The company had problems deciding which countries to target for converting the free users to paid subscribers. It also had problems keeping the existing paid subscribers hooked.
In recent years YouTube has conducted many kinds of research on the market trend and the target audience. The company had also spent a lot on its marketing campaigns. They have concentrated on building a new infrastructure to attract the attention of a broader group of potential users.
Cohen had recently said that the company was able to pay over $4billion to the music industry in just 12 months. The perspective of the music industry about YouTube has also changed. Instead of bashing the platform, they are now praising it.
Warner Music Group’s chief executing officer Max Lousada had said that music had always been a significant part of the platform. And it is great that the platform is on its way to becoming a massive force in the streaming and subscription business as well.
YouTube’s main competitors are Apple Music and Amazon Music. But being the most popular video-sharing platform in the world, YouTube already has an advantage over these services. It has a great chance at converting its existing audience into paid subscribers who are annoyed by the ads.
Kyncl said that they did not expect to hit 50 million paid subscribers this soon.
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