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YouTube Music reaches 50 million subscribers

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YouTube announced that it has more than 50 million paid subscribers to its music service, an important milestone for the Google video site, which has long been criticized by Hollywood record labels and studios for giving away its work for free.

This 50 million figure includes people who pay for YouTube Music, YouTube Premium customers who get music as part of their subscription, as well as customers still on a trial basis. The company has yet to disclose how much revenue it is generating from these subscriptions, nor the average price that users pay.

Google has experimented with charging for music over the past decade, switching between several different products and names, without much success. But the performance of the current music service, launched in June 2018, suggests that YouTube has finally figured out how to persuade many of its customers to pay for music. YouTube is the fastest growing paid music service in the world, according to Media Research, and now accounts for about 8% of the world’s subscribers. Spotify is the first by a wide margin.

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This is encouraging news for investors in YouTube’s parent company, Alphabet Inc. YouTube’s free advertising business already makes it one of the largest media businesses in the world. YouTube reported ad sales of $7 billion in the last quarter, an 84% increase over the previous year.

Cohen came of age in the 1980s hip-hop scene, working with artists such as Run-DMC, LL Cool J and the Beastie Boys, and rose through the ranks to help run one of the top three record labels, Warner Music Group.

But YouTube was the music industry’s bete noire, an even larger proprietary technology company, both founded on the idea that information should be free and easily accessible. The company was sued for copyright infringement and labeled bad by many of its entertainment detractors.

The music industry, which blamed the internet for the 15-year decline in its sales, wanted people to pay for music. Executives lamented that YouTube could build a huge subscription business. If the company converted just 5% of its 2 billion users, it would have 100 million subscribers. But YouTube has always prioritized its advertising business above all else.

Source: Bloomberg

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