YouTube has officially launched its long-awaited music streaming service, which has been rumored for more than a year now. They also ended their months-long dispute and signed a licensing deal with independent record companies. The deal was closed with Merlin, an organization that represents thousands of small labels worldwide, which cleared them to set up their beta version of the service and compete in the marketplace with the likes of Spotify and Pandora. The company had already reached agreements with the three major labels (Sony, Universal, and Warner), the New York Times reports. The specifics of the deal were not disclosed.
For more than a year, YouTube (owned by Google) has been working to preserve its free model while also giving paying subscribers extensive access to music. Before this new deal was made, the trade groups that represented small labels had complained that the deals their members were being offered were less than those of the three major labels. As NYT points out, the clause that had stated that YouTube had the right to reduce royalty rates for all labels if one of them agreed to a lesser deal had upset the small labels.
According to Wired, YouTube's new service allows music to be played both in web browsers and mobile apps. The mobile version has two tiers: A free ad-supported service that streams playlists and the premium Music Key, which costs $7.99 per month for beta users (it will eventually cost $9.99/month) and is add free. It also allows users to play YouTube playlists while simultaneously running other apps as well as listen to those playlists in offline mode.
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