YouTube signs deal with Universal Music Group ahead of music subscription plans

  • Wednesday, December 20th, 2017
  • Author: Tim Maytom
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Googles YouTube unit has signed a second multi-year agreement with a major music label as the platform prepares to expand its paid-subscription businesses to include a music streaming service. The deal with Universal Music Group (UMG)  will cover global rights to artists including Taylor Swift and Jay-Z.

“Were thrilled to strengthen our partnership with Universal Music Group,” said Susan Wojcicki, CEO of YouTube. “This agreement means we can drive more value to the industry, break and support more artists and deliver an incredible music experience to fans around the world.”

According to Bloomberg, YouTubes paid music service, Remix, is expected to go live in March 2018, and will aim to compete with Spotify, Apple Music and other music streaming services. YouTube is also reportedly in talks with Sony Music and Merlin, a consortium of independent labels, to secure additional rights.

“This important step forward provides our recording artists and songwriters improved content flexibility and growing compensation from YouTubes ad-supported and paid-subscription tiers, while also furthering YouTubes commitment to manage music rights on its platform,” said Lucian Grainge, chairman of UMG. “I look forward to collaborating with Susan and her team at YouTube on the important work ahead to advance artists interests and sustain the music industrys recent growth.”

YouTubes deal with UMG appears to include a promise to clamp down on pirated content on the platform. Despite Googles best efforts, many tracks and albums are still uploaded by non-rights holders and result in record companies, artists and songwriters missing out on revenues.

Pushing consumers towards a new paid subscription model would help alleviate this problem, as well as promoting a stronger relationship with major record labels. The deal comes roughly six months after a similar agreement was reached with Warner Music Group, which also extended its recorded music and publishing deal with the platform for multiple years.

YouTube has experimented with paid-subscription business models before, most recently with YouTube Red, which launched in the US in 2015. However, uptake remains limited at the moment.

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