YouTube has yet another tool to compete with Apple. YouTube's ad-free Music Key will begin on an invite-only basis next week with a promotional subscription price of $7.99 per month -- discounted from $9.99. YouTube also is adding a music-focused tab that includes favorites and recommended playlists.
Music Key falls in line with Google’s trend of investing in mobile entertainment options in order to drive revenue beyond its search-engine business. But the competition in this field is fierce: Apple just purchased Beats Electronics in May for $3 billion and Pandora and Spotify are wildly popular.
"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," James McQuivey, an analyst with Forrester Research, said in an e-mail.
Advertisers will not be able to target their ads specifically to the free, ad-supported videos that live within YouTube's new music tab, a YouTube spokesman said. The ads that will run against those videos will be the same as ads that run against normal YouTube videos. For the audio-only songs, a video ad will still play before a static image appears in the player while the song streams.
Source: http://adage.com/article/digital/youtube-unveils-music-streaming-service-challenging-apple/295835/
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