YouTube (GOOG) Set to Launch Subscription-based Music Service

Google (GOOG)’s YouTube said on Tuesday that it plans to launch a paid streaming music service, amid criticism that the free video website might block the music content of a number of independent artists who had not agreed to new deal terms.

In confirming the offering, YouTube said the new service will “bring our music partners new revenue streams in addition to the hundreds of millions of dollars YouTube already generates for them each year.”

A statement from Google is the first official reveal of the service, which has been rumored for some time.

The news comes as some independent record labels and music trade groups have criticized YouTube’s plans to potentially block the content of certain artists from appearing on YouTube. Last month the Worldwide Independent Music Industry Network [WIN], which represents indie firms globally, said in press release that the deals YouTube is offering are on “highly unfavorable, and non-negotiable terms” for the soon-to-be launched subscription service. WIN urged the free video-sharing site to negotiate with them to come to a deal.

Alison Wenham, the CEO of WIN said, “Put simply, by refusing to engage with and listen to the concerns of the independent music sector YouTube is making a grave error of commercial judgment in misreading the market.”

There has been no blockade confirmation from Google on independent artists who have not agreed to new deal terms allowing playback.

The new service, which according to the search giant has partnered with “hundreds of major and independent” music labels including music giants Sony, Warner and Universal, is expected to launch at the end of this summer and will allow users to listen to music without any ads.

Shares of Google closed at $543.01 on Tuesday.

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