YouTube Said to Plan Subscription Music Service

Photographer: Kiyoshi Ota/Bloomberg

YouTube is the Web’s most widely-used video site. Close

YouTube is the Web’s most widely-used video site.

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Photographer: Kiyoshi Ota/Bloomberg

YouTube is the Web’s most widely-used video site.

Google Inc. (GOOG)’s YouTube is poised to start a subscription-music service, according to people familiar with the matter, setting up competition with streaming providers Spotify Ltd. and Rdio Inc.

The service could start as soon as the end of the year, said the people, who asked not to be identified because the matter hasn’t been made public.

A subscription offering would supplement advertising sales and advance Google’s goal of increasing revenue at YouTube, the Web’s most widely-used video site. The company, based in Mountain View, California, already has a $9.99-a-month music-streaming service on its Google Play entertainment site, and is adding content to take advantage of the popularity of mobile devices using its Android software.

“We’re always working on new and better ways for people to enjoy YouTube content across all screens, and on giving partners more opportunities to reach their fans,” Matt McLernon, a spokesman for YouTube, said yesterday. “However, we have nothing to announce at this time.”

In July, the company invested $50 million in Vevo LLC, a video website started by music companies that has a big presence on YouTube.

Google rose 2.4 percent to $1,031.41 yesterday in New York. The shares have gained 46 percent this year, versus the 22 percent increase in the Standard & Poor’s 500 Index.

Plans for a YouTube subscription service were reported yesterday in the Los Angeles Times. The new product would integrate with Google Play’s Music All Access, the newspaper said. It also would offer features such as commercial-free listening and the ability to store music on phones, the Times said.

To contact the reporter on this story: Brian Womack in San Francisco at bwomack1@bloomberg.net

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net; Pui-Wing Tam at ptam13@bloomberg.net

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