Though there is not much special in YouTube Music Key, the music streaming and subscription service Google launched on Thursday 12 Nov, I wouldn’t call it “a bore”.

Firstly, the “not so special” part.  YouTube Music Key is clearly joining a rather loud party.  According to Strategy Analytics’ media and music forecasts, streaming is the fastest growing segment in the digital music industry.  Spotify, Pandora and a plethora of other services have increasingly gained popularity.  Actually we have found YouTube’s participation in the game long overdue, considering that YouTube has been selected as a top destination when consumers look for music, in a recent Strategy Analytics survey.

The service is still in an invite-only beta stage.  Initially it will be available in the US, UK, Spain, Italy, Finland, Portugal and Ireland, and will be made available to the global market when the beta stage is over. Supporting Android (and iOS to come soon) as well as desktop, YouTube Music Key offers a promotional rate of $/£/€ 7.99 out of a normal rate of 9.99 per month, to early adopters/invitees.  YouTube Music Key adds a "Music" tab to its mobile app and its website navigation that will show music videos, recommended and trending playlists, plus featured songs that pop up on any channels to which you may subscribe, based on your listening history on YouTube and your music library on device. This ability to market to potential users far surpasses that of any other service.

There are two issues facing Google, however.  One is the positioning of YouTube Music Key vs. the existing Google Play Music All Access.  Currently, a paid subscriber of GPMAA will get a subscription to Music Key, and vice versa.  However we believe Google needs to either consolidate the two services or clearly differentiate them to make the prepositions more attractive.  Incidentally, Apple is facing a similar issue with its iTunes Radio after it acquired Beats Music.  It would be interesting to see how the two industry giants should solve their, probably luxuriously enviable, problems.

Another issue is how to stand out from the more established players, especially Spotify, and in the US, Pandora.  Despite the YouTube brand clout, when it comes to payment, the brand may even play to Google’s disadvantage among consumers, as it has been known for being “free”.  Therefore we think a kind of collaboration with mobile carriers may be a route to consider.  As we have seen, AT&T, Sprint and especially T-Mobile have been active in offering music streaming services through bundling with OTT services (while Verizon is the only one among the top carriers in the US market that has not done so).  Similar partnerships are also not uncommon in other markets.

Then, the “not boring” part.  Google acquired Sonza in July, giving YouTube Music Key a significant advantage in the ability to provide listeners a degree of curation unmatched by Spotify and others.  A more visible difference though, is that, as a video sharing platform, YouTube has a vast repertoire of music videos, and has become a de facto platform of choice for artists to publish their official music videos.  This is an asset YouTube Music Key is riding on.  When a song that has an official video released is being streamed, the subscriber will have the chance to download or stream the video at the same time.  So, in addition to listening to the songs, I would be able to watch them as well.  This may well have become a daily experience in the desktop environment, music video playing on while I’m working on a Word document or checking out my friends’ Facebook update.  On a mobile device, especially on the go, I find the user experience unusual, without trying it out first handedly though.  However, YouTube also promised that the music will not be switched off even if I lock the screen or switch to another application.

Anything else that YouTube Music Key is different from Spotify? Oh, yes. If you include all the unofficial music, bootleg copies, concerts, remixes, parodies and lyrics videos, YouTube has a music library unmatched by any other service out there.  And it plays Taylor Swift.  Is she heralding a move away from Spotify to YouTube?  Watch out for Digital Media Strategy’s in depth analysis on the shifting balance of power in the music industry.