On November 12, 2015, Alphabet’s (GOOG) YouTube announced the release of its YouTube Music app. The app is free and is also available with a YouTube Red subscription. The free app without the YouTube Red subscription is ad-supported, whereas it’s ad-free when bundled with a YouTube Red subscription. In October 2015, YouTube launched YouTube Red, an online, subscription-based video service priced at $10 per month.
Competition in the music streaming market has been increasing rapidly since the launch of Apple Music (AAPL) in June 2015, joining the already existing players in the market like Pandora Media (P) and Spotify.
The standalone music app from YouTube bundled with YouTube Red is an attempt by Alphabet to monetize YouTube in a better way.
YouTube has maintained its leadership position in the US video advertising market over many years. According to a report from eMarketer, YouTube will likely continue to maintain its top position in the years to come, although its share of the US video advertisement market will, to some extent, likely decline. As the chart below shows, it’s expected that YouTube’s share of the US video advertisement market will fall from 20% in 2015 to 17.7% in 2017.
What’s different about YouTube’s Music app?
YouTube’s Music app has around 30 million songs in its music library. This app offers only music-based search results, including music videos that also consists of footage from a live concert for an artist. The app also creates a playlist for the user according to the genre preferences of the user. The app creates the playlist using a combination of computer algorithms and humans, who offer curated playlists. In addition, the app also provides a page that lists popular music or music videos.
Continue to the next part of this series for a look at Liberty Media’s latest initiatives as of November 2015.