YouTube-LogoThere have been credible rumours about YouTube’s ambition to launch a subscription music service for some time now, but this morning there’s more flesh on the bones of that speculation from Billboard and the Financial Times.

The former claims that the new service is “akin to a Spotify, but with video” and will launch later this year, with an emphasis on mobile listening and a combination of an ad-supported free tier and premium offering that includes offline listening.

Billboard adds that YouTube already has “most of the licences it needs” for the new service, with parent company Google having negotiated them at the same time as securing deals for its separate Google Play Music All Access service, which launched earlier this year. As ever, YouTube is batting back the speculation with a “nothing to announce at this time” comment.

There’s no doubt that a mobile-oriented YouTube-branded music service would make a big splash in the market, particularly for younger people who already use YouTube as their de-facto streaming music service, and who are largely responsible for the fact that 40% of YouTube’s traffic now comes from mobile devices – up from 25% last year.

Questions? How YouTube’s new music service is positioned alongside Google All Access could be fun: there may be resources for both now, but in the long term wouldn’t a single Google music service be a stronger contender? And if so, which one?

YouTube’s ability to upsell people from free to paid subscriptions is also a big unknown, with no figures available yet on how well it’s doing that with paid YouTube channels. It’ll also face the same curation, discovery and interface challenges as all the established streaming services.

And expect plenty of interest in the new service’s payouts: the likes of Spotify are already sore that they attract so much artist vitriol for payouts that per-stream are considerably higher than YouTube’s. When it launches a direct competitor, we’d expect there to be more public discussion about the value of a YouTube stream versus Spotify, Pandora and the rest.