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YouTube Music launches Tuesday; YouTube Red to be replaced with more expensive YouTube Premium

YouTube is getting ready to a launch a new version of its music service — and at the same time it is getting ready to charge more to see originals shows like a “Karate Kid” spinoff.

Background: Two years ago, YouTube launched YouTube Red, a service that gave subscribers an on-demand music service, more or less similar to Spotify or Apple Music — as well as access to original programming created just for the service. YouTube Red also removed ads from the world’s largest video service.

All of that cost $10. But now that’s changing.

Next week, YouTube is launching YouTube Music — a revamped version of its existing music service that is functionally the same, but comes with extra bells and whistles like personalized playlists based on your YouTube history and other usage patterns.

That service, which is supposed to soft-launch on Tuesday, will cost $10 a month after a trial period. (That same service will eventually also replace Google Play Music, a rival music service Google has inexplicably operated at the same time it was trying to get YouTube Music off the ground.)

Now YouTube intends to charge $2 more for the other parts of YouTube Red, which will be renamed YouTube Premium — but will require you to also pay for YouTube Music.

That is: If you want to watch ad-free, YouTube original shows like “Cobra Kai,” which appears to have a bit of buzz and four million views, you’re now going to have pay $12 a month, instead of $10 a month.

This makes sense for a couple reasons:

  • YouTube has always thought of YouTube Red as a music subscription service, even though it didn’t usually say that in public. YouTube Music was built in large part to placate music labels who complained that YouTube’s free, ad-supported service didn’t generate enough revenue for them. YouTube CEO Susan Wojcicki even referred to YouTube Red as a music service at Recode’s Code Media conference in February, which seemed inadvertent at the time, but makes a lot more sense now.
  • While YouTube generates an enormous amount of money, and is owned by Google, which makes an unbelievable amount of money, the company has been not been spending Netflix-like or Amazon-like sums on its original programming that showed up on YouTube Red. But maybe this will make it easier for YouTube and Google executives to decide just how valuable “Cobra Kai” and other programs are — they’ll be able to see who wants to pay them for a Spotify-like music service, and who wants to see YouTube originals, and charge them accordingly. And maybe that will give them confidence to spend more.

YouTube is likely going to publish something official about all of this soon. The company had been planning on a rollout next Tuesday, but is scrambling to catch up after pundit Bob Lefsetz published his thoughts about the service after seeing a demo from Lyor Cohen, YouTube’s ambassador to the music business.

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