Will YouTube's Subscription Music Service Be Profitable?
- EMarketer estimates that YouTube alone will generate more than $7.2 billion in ad revenues this year.
- Google is hoping that users will pay a promotional lifetime price of $7.99 per month or a standard monthly price of $9.99 for a Music Key subscription.
- The launch of Music Key comes after Apple's iTunes model
- Google keeps 30 percent of that revenue after paying royalties and licensing
- Approximately $133 million to $436 million would be left for Google each year
This week, Google is continuing its expansion by attempting to penetrate the subscription music market. Music Key is only one part of Google’s music push.Free users will now see tabs for an artist’s discography on Android, iOS and the web. The new tabs will allow users to easily locate and play full albums on Youtube for the first time. The new tab will also make personalized recommendations and provide links to trending music.
I think that music streaming is increasing becoming very popular with consumers as it doesn't take up memory on their device allow them to listen to a much larger library compared to it being on their phone or tablet. At launch many people will not sign up to this service as Spofiy, Pandora and Deezer currently control the streaming sector and will have to wait till alot of users memebrship to run out before they see a huge spike in signing up numbers.
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