Comment | YouTube Music: Google is late to the party

Sounak Mitra

On Tuesday, Google launched YouTube Music in India, a service that the company introduced globally in November 2015. This was a few weeks after Spotify, the most popular music streaming app in Europe and the Americas, entered the Indian market.

YouTube Music will come with a subscription fee of Rs 99 (individual subscription) a month and YouTube Premium will be priced at Rs 129 (individual subscription) per month. YouTube Premium is only slightly higher than Spotify’s subscription rate of Rs 119 a month. Both come with three-month free trial option. Besides, there is the advertisement-led free version. YouTube Premium subscription is bundled with normal YouTube, YouTube Music and YouTube Originals, while YouTube Music subscription is standalone music.

Spotify is not the only music streaming app YouTube Music will have to compete with in India. The market is quite crowded with a dozen home-grown and global music streaming apps that offer free and premium services.

Amazon’s Prime Music comes with Amazon’s prime subscription that also gives advertisement-free movies, exclusive e-commerce deals and free delivery for Rs 999 a year, or Rs 129 if paid monthly. Apple Music charges Rs 120 a month (individual subscription) with three months free trial in India. Besides, there are home-grown players like Gaana, JioSaavn (majority owned by Reliance Jio), Hungama, Airtel’s Wynk, Google Play Music, SoundCloud, among others. Most of the home-grown music streaming apps charge Rs 99 a month with a month’s free trial.

In a crowded music streaming market, YouTube Music is a late entrant and will not find the going easy.

It is unclear why Google waited for so long to launch YouTube Music in India, despite the fact that YouTube’s video streaming service was officially launched in India in May 2008. At present, YouTube is the largest video streaming platform in India with about 245 million monthly active users, which Google claims has been growing by 100 percent every year.

YouTube had the scope to leverage its advantage of being present in the country for more than a decade while others started operations later. Music has always been a favourite entertainment tool for 1.3 billion Indians, thanks to music being a staple in movies.

Youtube is also a well-known brand. Users of smartphones have it on their phones and it is a frequently used application (through the browser or app). Yet, YouTube did not see it fit to launch its music service earlier.

What changed their mind now? While Spotify’s entry could be one trigger for the YouTube Music launch, the popularity of home-grown apps, and services such as Amazon’s Prime Music may also have alerted YouTube to the opportunity.

Another reason could be that YouTube has not been successful in making its video streaming service a premium one. Despite its rental services (of movies), most of videos and movies watched on YouTube are free of cost. The main method through which YouTube earns money is through advertisements. At one point, piracy was a big issue even on YouTube, which the company has curbed down to a great extent lately.

The success of paid video streaming services such as Netflix and Amazon’s Prime Videos, and home-grown video streaming apps like HotStar, AltBalaji, SonyLiv, Zee5 and HoiChoi, among others, may have made YouTube realise its failure in the video content market. YouTube Music is probably one way of turning things around, at least in the music market.

Still, YouTube’s biggest challenge in India would be getting users to pay for music streaming although it has a base of millions of dedicated users who use its video streaming service. This challenge exists because Indians are accustomed to getting free music streaming services (but with advertisements).

Besides, YouTube also needs to remember that it is up against music streaming services, owned by companies with deep pockets. Is the market big enough for everyone?

At present, about 100 million Indians use different apps for music streaming but only 1 percent of them are paid subscribers. On an average, 285 Indians visit websites offering pirated music every second. Piracy has so far been the toughest problem for music companies in India. True, that has been changing lately thanks to streaming apps and cheap mobile internet. But, the change is very slow, and making users of pirated music pay won’t be easy.

However, there’s hope. Consulting firm EY predicted that India will have 273 million people streaming music online by 2020. Most of them will be free users but some may be willing to convert to paid options. YouTube will hope to take a sizeable share among users who ae willing to convert to paid offers. How much of a share it takes will determine if YouTube’s premium offerings is  success in India. There is another possibility, of YouTube being content with retaining users of its free offering but being served advertisements instead.

Disclaimer: Moneycontrol and Network18 are owned by Independent Media Trust, which is part of the same group that owns JioMusic, a music streaming app.