Is YouTube Way Too Late to the Game with Music Key?

Is YouTube Way Too Late to the Game with Music Key?

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I’ve been avoiding covering YouTube’s Music Key service. Quite honestly I find it a non-story because YouTube is late to the game. Way too late. This service should have been available years ago. But now that artists are starting to take a stand for and against streaming music, I simply have to talk about this subject because streaming music like Spotify, iTunes and YouTube’s Music Key are the future.

So what is YouTube’s Music Key? Much like Spotify, it is a streaming music service that is currently in beta and not widely available. But it allows for Ad-free music, background listening and offline playback. It has been long overdue, and is a direct competitor to services like Spotify.

Spotify: The Industry Leader in Streaming Music

Spotify charges $9.99 for their premium service, which features no ads and offline playback, much like the new YouTube service. Reports from Spotify indicate that they have “succeeded in growing revenues for artists in every country where operate”. Spotify says it is the alternative to piracy, a way for artists to get their music out there without getting paid nothing for it. Spotify pays approximately 70% of their total revenue to rights holders. That includes both artists, labels, distributors, publishers and anyone else that has their hand in the pot.

youtube music key vs spotify

Given Spotify’s formula for payouts, an independent artist can stand to make a good deal of money per listen relative to a big label artist like Taylor Swift. The standard Spotify revenue formula can cause artists to get as little as 0.6 cents per listen, which equates to roughly 167 listens to make a buck.

If you are a Spotify user like me, you’ll notice that Taylor Swift has been removed from all of your playlists (she was on there for the kids, I swear). That’s because she and her rights holders believe she is getting a raw deal in terms of her rate. A hit album like hers made something in the range of $425,000 a month according to data from 2013.

YouTube’s Music Key: Cheaper Than Spotify, But is That Enough?

YouTube’s Music Key service should be very similar to Spotify, although they will only be charging $7.99 per month. Including Taylor Swift. I would expect similar rates to Spotify for artists, however no official numbers have been released at this point and numerous sources indicate that YouTube intends to be the frontrunner in giving higher rates to musicians, something that appears to be a key reason Taylor Swift departed Spotify.

There could be another reason. And I’ll be honest, the first thought to cross my mind was that this is all a press stunt by YouTube/Google to bring attention to their new service. I’d say it’s working if it is. According to reports by NME, respected musician Billy Bragg has claimed that Taylor Swift has signed an exclusive deal with Google to help launch their service, which is a perfectly logical reason why she pulled her content from Spotify – although she has gone on record to deny this. But, somebody has to be footing the bill for her slice of the $6 million Spotify plans to pay big label artists this year.

Despite this power struggle between Google, Spotify and whether or not my kids can listen to Taylor Swift the fact remains that like online video, steaming music is the future. Taylor Swift is making a major gamble on the music service from YouTube and not the established Spotify. Although YouTube is backed by the behemoth that is Google, it’s likely that YouTube is too late to the party with Music Key and their service will be relegated to a second tier music service, much like G+ has been in the social networking game.


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