is facing its second setback in a matter of weeks when it comes
to the launch of its long-awaited YouTube Music service. Last
week, Shiva Rajaraman left YouTube for the rockin' offices at
Spotify. About a week earlier, Chris LaRosa left YouTube to work
on an independent project.
These two were previously working closely together on a music
subscription service for YouTube. LaRosa had been the liaison
between YouTube and music publishers and was responsible for
bringing official music videos to YouTube. He reported to
YouTube, in short, has been in flux most of the year, and many
observers had expected to see its music service by now.
Meanwhile, Spotify is growing rapidly and now has 40 million
active listeners and 10 million paid subscribers. At what
point does it become too late for Google to compete with the
YouTube: the most popular music streaming site
LaRosa did a lot of good for YouTube before he left, transforming
the video streaming site into a music streaming paradise. Google
has a joint venture with
and Universal to publish official music videos through Vevo, the
most popular YouTube network.
Indeed, YouTube is great for streaming individual songs. The
experience may be even better than on Spotify. YouTube's global
reach also far exceeds Spotify's presence in just 56 countries.
As a result, YouTube's most popular music videos far exceed the
number of streams of the same song on Spotify. The most streamed
song on Spotify, Avicii's "Wake Me Up," had 235 million plays as
of May. The same song had about 500 million plays on YouTube
around the same time. Of course, "Gangnam Style" takes the prize
for most popular song on YouTube, with over 2 billion views.
The popularity of YouTube as a music streaming destination
gives Google a wide window through which to launch a dedicated
YouTube music service. With a built-in audience, Google just has
to serve them what they want. It can easily place ads around
music videos to entice users to sign up and try the service. The
question is: What can YouTube do that Spotify can't?
YouTube Music needs more than playlists
The obvious answer is that YouTube has a treasure trove of music
videos it can integrate into its service. At the same time, a
service that just produces auto-playlists of music videos
probably won't produce significantly more engagement for YouTube.
People put on playlists and go off to work on something else;
they don't stare at their computer screen.
Nonetheless, Google has been taking steps to improve its
playlist-making functionality. It recently purchased Songza,
which specializes in curating context-appropriate playlists for
its listeners. Google said it plans to integrate Songza's data
into its current music service, Google Play Music. In addition,
has been collecting data from its own Google Play Music All
Access subscribers to improve playlist technology.
YouTube recently redesigned its site to feature playlists more
prominently. Source: YouTube
Playlists were integral to Spotify's initial popularity. Being
able to easily share playlists and find new user-made and curated
playlists from magazines and bloggers was something unique. The
model has been copied since, most notably with Beats Music --
which hasn't exactly captured a huge audience.
YouTube's music streaming service will have to offer something
more than another playlist maker. I expect Google will find a way
to integrate YouTube's video library, as well as its All Access
and Songza properties, into whatever it pushes out to music fans,
but it probably needs to be more than that.
One property that Google could leverage is Android, as
smartphones have become most people's primary music listening
device. Just as Apple integrated iTunes radio with iOS, Google
could do the same for its music streaming service and Android.
Android's share of the market continues to climb, reaching 85%
You've got their attention; now keep it
YouTube is in the excellent position of owning the most popular
music streaming property. If Google wants to build a dedicated
music streaming service on top of the video platform, it
certainly will attract a large initial audience -- just as Apple
was able to do with iTunes Radio. Keeping that audience, however,
may prove quite difficult unless Google is able to offer
something nobody else can. Certainly, video will be a part of
that, but people sign up for music streaming services for the
all-you-can-stream buffet of listening, not to watch videos for
Google has a wide window into which it should be able to
successfully launch a YouTube music service. But as more people
sign up for Spotify, the more it has to differentiate its product
from the competition to keep listeners around after the
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originally appeared on Fool.com.
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