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Google considers subscription YouTube service

YouTube is reportedly preparing to launch a subscription music service later this year.

Fortune has reported that Google-owned YouTube will run its music service separately from Google Music, where users can buy and store tracks via Google Play. Instead, YouTube's future offering will allow anyone to listen to tracks for free, though subscription options for ad-free listening are likely.

Google declined to comment directly on the report. "While we don't comment on rumor or speculation, there are some content creators that think they would benefit from a subscription revenue stream in addition to ads, so we're looking at that," the company said.

YouTube already boasts a massive following of music fans; last year, Nielsen found that teens gravitate to YouTube for music more than any other source. But YouTube currently makes its money from selling ads with music videos and providing a cut of its profits to record companies. As noted by Fortune, music-streaming subscriptions are not as profitable as downloads at this point, but they are growing in popularity.

Recently, the NPD Group found that the increased use of free music streaming services led to a significant decline in illegal P2P music file sharing last year. The volume of illegally downloaded music files from P2P services dropped 26 per cent in 2012 compared to the previous year, the research firm said. Moreover, 40 per cent of those who had illegally downloaded music via P2P services in 2011 reported that they had either stopped altogether, or downloaded less.

In recent years, meanwhile, rumours about music-streaming services have been focused primarily on Apple. Talk about such a service from Cupertino ramped up after it acquired Lala in 2009, but nothing ever materialised. Reports re-emerged in September, though, when the Wall Street Journal said Apple was working on a custom radio service that would rival those offered by Spotify, Pandora, and Rdio.