Is YouTube About to Launch a Music Streaming Service?

YouTube will launch a streaming music service this summer.

In fact, Google – the owner of YouTube – plans to launch two separate music services this year, according to a report by Billboard.

Rumors that Google will be entering the competitive digital streaming music market – currently occupied by Spotify, Rhapsody, Rdio, MOG and more – have been swirling since the beginning of the year. But now it is revealed that Google has signed a licensing deal with Warner Music Group, one of the three major labels, according to anonymous executives that spoke to Billboard. Google also is in negotiations with the other two major labels, Sony Music Entertainment and Universal Music Group.

Executives at Warner declined to comment on the matter, but a YouTube spokesman didn’t exactly deny the deal.

“While we don’t comment on rumor or speculation, there are some content creators that think they would benefit from a subscription revenue stream in addition to ads, so we’re looking at that,” said the spokesman.

Full details on the services haven’t been released, though it is known that one service will be designed for Google’s Android platform, Google Play. However, the YouTube subscription service is expected to be open to anyone. While some music will be available for free, there is expected to be an optional subscription fee that will unlock additional features.

Other services have already tried out this model, with an example being Spotify which provides free desktop music streaming that is supported by advertisements. When subscribers pay a monthly fee, however, those ads are eliminated, and the service can be streamed to mobile devices, among other features.

As Billboard points out, YouTube’s advantage will in the crowded market of streaming music comes from its already huge user base – the site currently attracts 800 million unique viewers every month. All current streaming services combined (free and paid) attract only tens of millions of users.

Google also has the advantage of having the resources to try different ad and revenue models because of its size. This likely also helps leverage negotiations with record labels, particularly since labels and Google already work together on YouTube now.