It seems like its all systems go for YouTube’s expected subscription music service.
The Google-owned streamer on Tuesday reached a multiyear licensing deal with Universal Music Group, the world’s largest music label, that will provide increased compensation and require YouTube to better police its site, the companies said Tuesday.
YouTube is expected to launch a Spotify-like service in 2018 and getting a deal with Universal, home to Selena Gomez, Eminem, Shawn Mendes and scores of other artists, is key to getting the paid service off the ground.
Meanwhile, YouTube has also reached a deal with Sony Music, according to Bloomberg.
Terms of the YouTube-Universal deal were not disclosed. But Lucian Grainge, the music label’s chief executive, said it contained “growing compensation” and “improved content flexibility” — which refer to stepped-up royalty payments, the need for YouTube to better protect song copyrights and the ability for artists to choose where their music will appear. (For instance, some of an artist’s songs can appear behind a paywall, while other songs can be tagged as free).
“This agreement means we can drive more value to the industry, break and support more artists and deliver an incredible music experience to fans around the world,” Susan Wojcicki, CEO of YouTube, said in a statement.
Getting music lovers to fork over $10 a month or some other subscription fee won’t be easy, according to Needham & Co. analyst Kerry Rice.
“Consumers generally like free,” Rice said. “Once you get free, it’s hard to start paying.”
Last year, YouTube made inroads with the music community when it hired Lyor Cohen, Warner Music’s former chief of music.
In May, YouTube renewed its deal with Warner Music under what company CEO Steve Cooper called “very difficult circumstances.”