YouTube’s Launches Music Streaming Service

There have been announcement and rumors for over a year regarding the entry of YouTube (which is owned by Google) into the streaming music business. You’ll be able to get music free as part of the normal YT site with the usual advertisement or sign up for the Music Key service for $10 per month. Google and YouTube announced the beta launch of the new service today with a nice video and lots of web information.

So Spotify, Pandora, and Sound Cloud now have a formidable competitor. However, in reality YouTube is already smashing these companies. The math works out something like this. According to a report on the Billboard website, 6 billion hours of video are consumed each month and 2.28 hours of that or roughly 40 % of the total are music videos or music performances. When people want to check out a new artist or a new recommended tune, they turn to YouTube. This makes YT the single biggest provider of music content in the world…and now they’re going to get music fans to pay $10 per month for the right to stream and listen “offline” (which means downloads) on their devices.

On the other hand, the other three streaming services claim around 12 billion listening hours…over an entire year!

YouTube has apparently worked out licensing deals with the major labels and has secured additional independent content through Merlin, a company that represents independent artists and labels. Estimates of the revenues that will be generated by this new side of YouTube top a billion dollars. The continuing controversy over the way that revenue is split between the corporate interests, labels, and artists may change the dynamic with Google and YouTube entering the business.

I read several articles and heard segments on NPR and the BBC about this announcement and no one reported on the audio quality of the millions and millions of tracks that will be streaming and/or downloaded. However, it seems reasonable to assume that the fidelity will be comparable to the competitors Spotify and Pandora. It would have been nice to see the 800-pound gorilla up the ante but that segment of the market will remain with Deezer and Tidal.

But just how will this affect Pono and iTunes? In the case of Pono, they may be a little late to the party with their high-end player and CD spec downloads. The did talk about a streaming version 2.0 of Pono hardware but it won’t be designed, manufactured, available until the second quarter of 2015, if ever. Perhaps downloads are a thing of the past? By the way I did get a very nice email from a Pono supporter the other day. Lucas wrote, “Hello, I finally found time for a proper listening session (with my Pono Player!), the AIX Sampler sounds mind-blowing! Although not all pieces are my style of music, I can certainly appreciate the sound quality, I’ll be sure to buy some of your HD material on my next buying spree.”

Pono supporters are going to be downloading CD spec music hoping that a high-resolution upgrade of their favorite music will eventually replace those tracks. If streaming at CD quality becomes a reality, then what’s the point in keeping with the download model? It makes sense for HDtracks and iTrax because the downloads are sourced from better than CD tapes and digital masters.

Downloading low fidelity or even CD quality is over. Streaming is the new king…at least for standard resolution music. High-resolution content or newly remastered standard resolution content has a few years before it too will be replaced by subscription services like Music Key…renamed Music Key HD.