Google Releasing Ad-Free YouTube Service

             Google will be releasing a service free of advertisements on YouTube. YouTube Red will cost android users who subscribe $9.99 per month, while those equipped with IPhones will be charged $12.99 per month. This price difference is due to the 30% charge that Apple applies on in app purchases. This is a critical development for both Google and the music industry alike, as it has become more common to stream music for no charge. Because of this, we are seeing sales decline in the both the CD and downloaded music industries. Many on the wrong side of this trend have been calling for paid subscriptions for quite some time. Currently, Spotify holds a following of over twenty million, while Apple Music has six and half million subscribers after only three months from launch. 

Of course, this would be large for the music industry as well as Google, creating an entire new stream of revenue that would expand the face of the brand as well as forging an alliance with many lucrative record labels that are looking for a greater profit than what they are receiving from these other streaming and music playing services. 

             If Google can use YouTube to gain more access to the online music industry, this could greatly affect both the direction of the industry as well as that of Google. As course, it will be difficult to sell this premium product, given the free accessibility to both video and music on the internet. The plethora of interconnected communities sharing information has made it difficult for business whose products are very easily electronically shared without any legal consequences. 

             The music business has certainly been going in the wrong direction for profit purposes, but giving people incentive to pay is what will drive them toward YouTube Red. CD's and downloaded music are both declining, as streaming becomes more and more popular. Offering customers a service that provides them with something they cannot get access to without the subscription will be the cornerstone of the launch. 

              The question is; why is Google interested in investing in the premium music industry? YouTube makes their capitol from leasing advertisements over the website to keep it free, as does Google. Why take such a drastic turn to get people to pay for music when they haven't for so long? Google is attempting to create a personalized journey for the customer, allowing them to hit play and sit back. Starting next year, they will also have access to YouTube originals and will be able to download videos and music onto their personalized device so they can listen to it at their own leisure, without being online. This service essentially gives the user access to all YouTube creations, with absolutely no advertisements. While Spotify and Apple Music have seen good days, this service could render them obsolete, given YouTube has almost monopolized the music video industry and unseated MTV in that regard. This service has very high upside for YouTube and therefore Google. As we already know, Google doesn't fail very often. 

http://techcrunch.com/2015/10/21/youtube-red/#.ehwht6:qlid

http://www.wsj.com/articles/google-to-launch-ad-free-youtube-subscription-service-1445472241