YouTube’s popularity on mobile devices such as Kindle, smartphones, and other tablet devices, has recently mushroomed as they have managed to solve a rather troublesome problem for record labels and music publishers: higher royalty rates and better organization. In two years the company’s growth increased by 36 percent and is expected to climb even higher as they launch their paid music service, due out as early as December.
Across the board YouTube, established in Mountain View, California in February of 2005 by three PayPal employees, has seen an increase in advertising with an estimated $4 billion in advertising sales in 2012 and this year could see $5 billion. A new product will undoubtedly draw in more revenue for the company, and perhaps even for those who publish their videos to the overwhelmingly popular site.
What does this mean for the consumer?
The founders of The Home Depot, Arthur Blank and Bernie Marcus, operated their company under the philosophy of “Stack it high, watch it fly,” and it would seem YouTube followed suit. In the past, they have been able to keep advertising rates low on PC’s, smartphones, and tablets. However it is not low rates that are the issues with smaller labels, but rather the licensing agreements which are troublesome. At the time of writing, current conditions of YouTube’s licensing contracts were not known. It is, however, rumored that YouTube is in the process of signing agreements with major recording companies such as Warner Music Group, Universal Music Group, and Sony Music Entertainment.
With YouTube’s new service launching soon and recently exposed, consumers will have the ability to pay for a premium service that will offer admittance to ad free videos from professionals, as well as amateur alike. A person creating a video of their nieces third birthday and embeds a featured or prominent song, then publishes to YouTube will now have a wider audience. In addition, users will now be able to switch from tablet to smartphone, for example, seamlessly with YouTube’s new service. Currently, if a consumer switched from laptop to cell phone, let’s say, there would be a slight interruption.
The expected cost to the consumer for the added music is expected to be about $10 a month, which is the average rate when compared to Spotify and Google Play All Access, which debuted in May, and is also a sibling company of YouTube as Google owns both companies.
And much like siblings sharing clothing, Google All Access users, which will remain as is, will have unlimited access to YouTube’s new version, but hopefully without the issues involved.
Though siblings, YouTube’s new service will still be kicking it old-school style ala 1980’s when MTV played music videos of an overly exposed Madonna. This has a future probability of tempting their audience to remain engaged longer, thus viewing more well placed ads. With a hip edge in place YouTube has seemingly managed to merge the best of both worlds together in what is hoped to be a beautiful union.
Are you willing to pay $10 a month for YouTube’s new service? What are your thoughts?
Written by Tara Aarness