The already competitive streaming music space will get even more heated as YouTube announced its intentions to enter the game next year. The world’s largest video platform, which is owned by Alphabet (Google), plans to launch “Remix” a paid subscription-based music service by March 2018. This isn’t Alphabet’s first foray into digital music as past efforts with Google Play Music and YouTube Music Key failed to make major impacts. This isn’t a surprising move as the streaming music market is forecasted to grow to $28 billion per year by 2030That’s a huge revenue pie to enjoy and Alphabet’s sworn enemies, Apple and Amazon, have claimed pieces already.

Streaming music services should be a little timid. YouTube is one of the world’s largest content platforms. Video comprises 55% of total time dedicated to on-demand streaming and YouTube alone accounts for 46%.  That’s domination. YouTube has 1.5 billion monthly users and even though it’s a purely video platform, 85% of its users consume music on the service, demonstrating high utility. This presents a very seamless opportunity to acquire users for “Remix” as users will not have to rely on two different apps. Look at how Instagram Stories has surpassed Snapchat. Also, YouTube has something streaming players like Spotify and Apple Music are trying to build: a plethora of video content. This will be its key differentiation.

YouTube is currently in discussions with major labels like Sony and Universal to secure licensing for their catalogs, while Warner Bros. has already signed on.”Remix” marks progress between YouTube and the music labels, as there’s been some tension between the two with labels criticizing YouTube for not paying enough. Labels get an average revenue per user from YouTube is $2.50. In comparison, Spotify and Apple Music each pay $42. The contrast is mainly due to how music content originates on YouTube. Most videos and uploaded by fans, so YouTube is paying ad share revenue to them versus the labels. There’s a reason why labels are trying to remove all this unofficial content. Establishing a real streaming music service should funnel more money to the labels.

For “Remix” to succeed, YouTube needs to do a few things

  1. YouTube needs to remove all the video content that features music for “free”.
  2.  It needs to secure/ create exclusive content
  3. YouTube needs to provide the most exceptional and immersive user experience



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Rex Pham

Originally from the Bay Area, who then moved to Los Angeles, then out to New York City. NYU Stern MBA c/o 2014. Inspired by the grind of NYC to create something that has value. Lover of all things digital, culture, and brand strategy.

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