Sign up to receive 5 free days of our daily summary for tech news.

Subscribe today for just $10/month for your first 3 months to access daily conference calls during the week of the Uber IPO. 

Read this article for free.

Already a subscriber? Log in here

Media Google Apple Entertainment

Why Google and the Music Industry Want a YouTube Hit

A forthcoming YouTube music service could be a turning point in the fraught relationship between Google and the major record labels over how consumers get access to digital music and how music creators get paid.

The new subscription service, expected to be launched later this quarter, is designed to offer record companies a way to generate more revenue from the massive amount of copyrighted music on YouTube. The offering also could enable Google to make a dent in the fast-growing digital music market, where the Web-search giant’s early efforts, including a Google Play streaming service initially made for Android phones, have been a disappointment.

Success is hardly guaranteed. The digital music business is crowded and competitive, and it’s not at all clear that the massive audience that comes to YouTube mainly for free videos will be interested in purchasing music.

It took the better part of a year for Google and the record labels to reach an agreement on the new YouTube music service, which is among the site’s top priorities this year, along with creating a walled-off version of YouTube for children. At one point during the tense negotiations, some music industry executives threatened to exercise a kind of “nuclear option” in which they would refuse to renew an existing licensing deal and instead seek the takedown of millions of YouTube videos.

In the end, though, the music labels saw little choice but to work with Google as they desperately seek new sources of revenue. Previously undisclosed details on Google’s music-related revenue show how far the company has to go to be a significant player in music sales.

What Is The Information?

Notes bb3aa5069205d702dda37fc71dc6f1c59df2310c4379304e9f1199f052af4884

Exclusive Articles

We broke it first. Receive original reporting you won't read anywhere else from the largest newsroom in tech.

Notebook b5103017ee163370a1667c9ce59ab0ef023875a17888105d26c185cadf31bb69

Daily news analysis

Every weeknight, we'll send you our reporters’ views on the day’s top tech news—distilled into one email.

Conference calls c9e664e8b96ee347d3e92b8309938f268422b9db98cfabca5c826fbb75054b23

Conference calls

Get access to our reporters and other top executives with monthly deep-dive calls into topics like startups and autonomous vehicles.

Events 499acedd16cffc41445edd76bfd302b2836c2a27419890f17130a6b10e2aa3df

Special Events

For no extra fee, get access to more than a dozen events yearly, from intimate dinners to larger gatherings with marquee speakers.

What else is included in my subscription?

Become a contributor

Share your views and find other subscribers by completing your profile. You’ll be listed in our contributor directory.

Slack community

Discuss topics and current events with our subscriber-only Slack group and share news about your company with other subscribers.

Annual Subscriber only benefits:

Org Charts

Access the only collection of tech company org charts. Our expanding database includes companies like Amazon, Snap, and Uber.

Crypto Newsletter

Our experts investigate the latest in the crypto world to keep you in-the-know about the movements of digital currencies.

Stay up to date on Silicon Valley

Sign up for Jessica Lessin’s (The Information’s CEO & Founder) free Saturday newsletter and also receive a complimentary week of our daily afternoon tech commentary email.

Already a subscriber? Log in here

Recent Articles

Apple Policy

Apple’s Grip on Apps Faces Challenge From Supreme Court Ruling

By Ashley Gold and Christopher Stern

Apple Semiconductors

Behind the Intel-Apple Modem Divorce

By Aaron Tilley

Venture Capital Enterprise Startups

Zapier’s Unusual Path to Profitability

By Kevin McLaughlin

Venture Capital Startups Entertainment

Scopely Sees Growth With Mobile Games That Live On

By Beejoli Shah

Lingering in the background was the music industry’s ire over Google’s refusal to do more to prevent its search engine from pointing to pirate music sites when people enter terms like “mp3.” Over the past three years the music industry has filed more than 100 million “take-down notices” to Google.