You will hopefully have seen our alert yesterday on the news that YouTube Music Premium is rolling out fully in 17 markets. You’ll also hopefully have seen our interviews with Lyor Cohen (YouTube’s global head of music) and director of product management for music products T. Jay Fowler where they talk about their bold ambitions for it.
In brief, the new service will charge $9.99 a month (or $14.99 a month for family plans) and so is going toe-to-toe with the major DSPs on price. But it has a serious catalogue advantage as it can add in much of the music-centric video content that its rivals simply do not have. But, as the boneyard of failed digital music companies shows, launching a service is one thing; making it fly is another thing entirely.
On the plus side, YouTube has arguably the biggest funnel in the world to convert free users into subscribers. It has, at last count, over 1.8bn active monthly users and around half of them are understood to watch a significant amount of music videos. It was a cliché even a decade ago to say that YouTube was “the biggest music service in the world” – but that didn’t make it any less true. And its pre-eminence here has not been challenged in the subsequent years. That is an enormous amount of potential subscribers it has built up. But that’s also its biggest problem…
On the negative side, YouTube is not just a metonym for “online video”, it’s also a synonym for “free”. By which we mean free at the point of use – it is open to everyone and viewers pay with their eyeballs, to use the company’s ocular vernacular, rather than with cash. For 13 years it has made a virtue of the fact that it is free (let’s just set the “value gap” debates to one side here) and it has also trumpeted the fact that its ad revenue is paid through to rightsholders while its Content ID technology has been developed to automate and streamline this as much as possible.
Yet, like Pavlov’s dog, this is about conditioning. Users are well used to not paying for content on YouTube beyond watching (or blocking) a few ads every now and again. As the original Napster found out in the early 2000s, trying to persuade a large number of users to pay for something they have been getting for free is very much a case of pushing on a closed door. (Of course we are not suggesting for a second that YouTube is playing fast and loose with copyright like Napster 1.0 did, but there is an identical behaviour conditioning element here that it has to break among its enormous userbase.)
Then there are the huge branding and market positioning issues. YouTube, as we noted above, is wholly associated with video. Music audio may be uploaded with pack shots or a series of still images, but users regard it first and foremost as a video service. The other DSPs are coming at video from the other direction; they are audio services slowly adding in video elements. YouTube Music Premium has the powerful brand recognition of a video service, but it needs to convince a large userbase that it is an audio service too.
Then there are the historic nomenclature barriers YouTube and parent company Google now have to dismantle. There was previously Google Play Music, which this new service will replace, while subscribers to Google Play Music also got access to YouTube Red (and vice versa). But there is also now YouTube Premium, which replaces YouTube Red, that costs $11.99 a month which has everything YouTube Music has and rolls in ad-free viewing across all of YouTube. Even people in the music industry are confused as to what they were all about. What hope does the consumer have?
Having seen it in action, the YouTube Music Premium experience is genuinely fantastic, the app’s UI is a delight and the recommendations are really strong. But that’s only a fraction of the battle here. Technology is what holds people there, but it’s the simplicity and clarity of the consumer messaging that gets them through the door in the first place.
And that – delivering a simplified message coming off the back of entrenched historical branding around video/free while simultaneously trying to rub out the false starts and linguistic confusion lashed to previous attempts in this space – is where YouTube Music Premium really has its work cut out.