23 May 2018
YouTube has now signed new deals with Universal Music Group and Sony Music Entertainment as it is preparing for the release of its own music subscription service. The deal with both these labels is said to be a long-term one and follows the renewal of deal YouTube did with Warner Music Group earlier this year. With this, it now has new contracts with top three major record labels in the music industry.
The exact financial details regarding the new deals are unknown for obvious reasons but Bloomberg's report does give a slight idea. It says that artists will get more flexibility and a better pay as per the deal with Universal. This is the only relevant detail that has become public so far but is enough to suggest that YouTube and record labels have most likely moved on from their differences related to royalties.
YouTube's stand-alone paid music service is already reported to make its debut next year. It suggested that the launch could be delayed beyond March but as music deals with major labels have now been finalized, we can expect it to become official around March 2018. The service will be competing against the market leaders Spotify and Apple Music along with other prominent players like Pandora and Deezer.
The new report also mentions that YouTube is likely to offer some of the videos exclusively on the paid service which will not be accessible to free users. This is a step through which it will hope to convert free users into paying subscribers. This approach is similar to how some music streaming services release certain albums exclusively for paid members for a brief period of time before making it available for everyone.