A YouTube logo seen at YouTube Space LA in this file photo. (Reuters photo)
YouTube has more than 50 million paid subscribers to its music service, a milestone for Google’s video site that has long been criticized by Hollywood record labels and studios for giving away their work.
That 50 million figure includes people paying for YouTube Music, YouTube Premium customers who get music as part of their subscription, as well as customers still on trial.
The company did not disclose the amount of revenue it generated from its subscriptions, or the average price paid by users.
Google has experimented with billing for music over the past decade, browsing through several different products and names with little success.
But the performance of the current music service, which 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 world’s fastest growing paid music service, according to Midia Research, and now has around 8% of subscribers globally. Spotify is the first by far.
Its business funded by free advertising already makes it one of the largest media companies in the world.
YouTube posted ad sales of $ 7 billion in the last quarter, up 84% from a year ago.
But YouTube was the pet peeve of the music industry, a tech company owned by an even bigger tech company, both founded on the idea that information should be free and easily accessible.
The company had been sued for copyright infringement and labeled bad by many of its entertainment critics.
The music industry, which blamed the internet for a 15-year drop in sales, wanted people to pay for the music.
Executives lamented that YouTube could build a massive subscription business if it wanted to. If the company only converted 5% of its two billion users, it would have 100 million subscribers. But he has always privileged his advertising activity above all.
YouTube signed new agreements with all major music rights holders in late 2017 and early 2018, paving the way for the new service in June of the same year.
YouTube Music has not been very successful in its first 10 months, according to Robert Kyncl, commercial director of YouTube.
The company had some of the resources to start a subscription business.
He didn’t know where to invest in marketing to convert his free users. Should it target rich countries like the US and UK where marketing is expensive but people have money, or poorer countries where marketing is cheap but customers wouldn’t pay as much? ? He didn’t know how to prevent people who signed up for the service from dropping him, either intentionally or inadvertently.
But over the past couple of years, YouTube has spent a significant amount of money marketing the service and built the teams and infrastructure to attract new customers and retain them.
“Music has always been a central part of their platform, so it’s great to see them also become a dynamic force in subscription streaming,” said Max Lousada, CEO of Recorded Music at Warner Music Group.