YouTube’s paid music streaming services have amassed 50m subscribers, a milestone for Google as it competes with Amazon, Apple and Spotify in the fiercely competitive market.

After a slow start since launching in 2018, YouTube’s music streaming services have attracted millions of new paying users in recent months to reach 50m subscribers in August, according to two people briefed on the figures.

That is up markedly compared with the 30m subscribers that YouTube reported in October last year, and reflects growing demand for YouTube Music, which costs $10 a month, and YouTube Premium, an expanded product with extra video features that costs $12 a month.

After years of friction with the music industry over YouTube’s struggle to convince some of its billions of users to pay for content, Google hired Lyor Cohen — a longtime record executive who helped develop artists like Kanye West — to lead the launch of YouTube Music and turn it into a rival to Spotify.

The expanded subscriber base makes Google a genuine competitor in the paid music streaming market after a series of failed product launches over the years. 

YouTube did not respond to a request for comment.

YouTube Music was “becoming to Gen Z what Spotify was to millennials half a decade ago”, said Mark Mulligan from Midia Research, an industry consultancy.

“Google’s YouTube Music has been the standout story of the music subscriber market . . . resonating both in many emerging markets and with younger audiences across the globe,” he added. 

Spotify reported it had reached 165m subscribers by the second quarter, while Apple and Amazon respectively had 78m and 63m subscribers at the end of the first quarter, according to Midia estimates. Spotify launched in 2006, Apple in 2015 and Amazon in 2016.

YouTube’s recent growth spurt defies more conservative expectations from Wall Street when it was first announced. Upon launching in 2018, Morgan Stanley analysts projected that YouTube Music would only reach 25m subscribers in 2022.

The analysts questioned whether YouTube Music would succeed after Google’s previous forays into paid music streaming, such as Google Play and YouTube Red, failed to gain traction. 

YouTube is the world’s largest video site, and slickly produced videos by pop stars draw billions of views. But record labels and artists have for years complained that YouTube was short-changing the industry with a proliferation of fan videos that used their music without licensing permission.

After joining YouTube in 2016, Cohen sought to mend the relationship with the large music labels — Universal Music, Sony and Warner — touting a new service to “make them rich”, according to executives involved in the meetings at the time.

“I’ve seen this industry evolve from an audio business, to an audiovisual business, and now — as my friend Chuck D puts it — to a visual-audio business,” Cohen said in June. “As a visual-audio platform, our goal is to become the leading revenue generator for the music industry.”

At the time, Cohen said that YouTube had paid out more than $4bn to music rightsholders in the previous 12 months. Out of the $4bn, 30 per cent came from subscriptions, while the rest was advertising revenue, he said. 

By comparison, Spotify said it paid $5bn to rightsholders last year.

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