YouTube could be key to Google's Spotify rival

Google’s rumored plans for a Spotify-like streaming music service are coming into clearer view, with a report that YouTube will play a big role.

Fortune, which says it was briefed by “sources in the record industry and at Google,” claims that YouTube will launch its music streaming service later this year. Like Spotify, it will reportedly allow anyone to listen to music for free, but will also offer a subscription plan for additional features and possibly ad-free listening.

YouTube’s service will reportedly have “some overlap” with Google Play Music, Google’s Android- and Web-based music service. Google Play will also get a subscription plan later this year, Fortune’s sources say.

The report leaves lots of questions unanswered, such as how much the service will cost and how exactly YouTube and Google Play will overlap. (For example, will YouTube’s service be available on Android phones? Will Google Play’s service be available on the Web? Or is this a single service that ties both brands together?) It’s not even clear whether YouTube’s offering would consist solely of music videos, standalone audio or some combination of the two.

This isn’t the first we’ve heard of a potential streaming music service from Google. Last month, the Financial Times and The Verge reported that Google was in talks with record labels, though the latter website warned that any launch was still “months away.”

Still, it wouldn’t be surprising if Google’s efforts to launch a streaming music service were gaining momentum. Music piracy declined by 17 percent last year, largely due to free, ad-supported streaming options such as Spotify and Pandora. The music industry has also warmed to other digital efforts such as the scan-and-match services offered by iTunes, Amazon Cloud Player and Google Play, after initially resisting efforts to let users access their songs from anywhere.

Accordingly, music revenues increased last year, the first gain for the recording industry since 1999. Although the music industry hasn’t given up on its anti-piracy efforts—such as the “six strikes” initiative that Internet service providers rolled out last month—record labels may have finally realized that offering as many legitimate options as possible is good for business as well as for listeners. That bodes well for more streaming music services from YouTube and others.

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