By Daniel Stillman

YouTube has officially thrown its hat into the competitive ring of music streaming services. Google, who owns YouTube unveiled its new, YouTube-centric music streaming service called “Music Key.” They are entering a competitive market that includes Spotify and Pandora.

Music Key will begin on an invite-only basis for a discount price of $7.99 for the ad-free service, while the standard price will be $9.99. Just like the website, there will be tabs for “Favorites” and “Recommended Playlists.”

Google’s launch of Music Key does have a strategy behind it. It’s a response to rival Apple, who purchased Beats Electronics back in May of this year. Not surprisingly, Beats has its own music streaming service.

“YouTube is in this business because they realize that Apple is about to get serious about subscription music and if Apple manages to turn people back to iTunes or Beats or whatever becomes of that combination, Apple will tie people even more completely to the iTunes digital platform,” said Forrester Research analyst James McQuivey.

A perk to having YouTube Music Key is that subscribers will also receive Google Play Music, Google’s own music streaming service, at no extra charge. Listeners will be able to watch the music videos on Music Key and Google Play will include songs that don’t have music videos.

Spotify should be most worried about Music Key. “YouTube is the number one place where people go for their music, especially with young people, “said CNET’s Bridget Carey. “What would make this different is you don’t have advertisements. And there’s kind of this sense that you can watch whatever you want, unlimited, make your own playlists. It could easily take over things like Spotify.

Spotify has 50 million listeners and 12.5 million subscribers according to Mark Mulligan, an industry analyst from Midia Research. Just imagine the impact of this service being offered by the most popular music and video website. Only time will tell if Music Key will be a success.

Here’s a CBS News newscast from November 13th reporting on the launch of Music Key:


Written by Ad Buzz

The American Advertising Federation Illinois Chapter brings to you Ad Buzz, a blog dedicated to all things advertising related, from our favorite campaigns to trends going on in the industry.

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