The deal with rights agency Merlin was signed recently after months of acrimonious negotiations, in which YouTube threatened to take down music videos by artists such as Adele and the Arctic Monkeys if its demands were not met, the Financial Times reported. The agreement paves the way for the Google-owned company to finally launch a paid-for music service, which will compete with Spotify, the Swedish streaming service, Deezer of France and Apple's Beats Music.
Merlin represents more than 20,000 labels from 39 countries. "One of the last significant obstacles to getting to market has been removed," said Mark Mulligan, music analyst at MIDiA Research.
YouTube, the world's biggest online video service, plans to start rolling out its paid tier within weeks, according to people familiar with the matter. The new service will allow users, who pay a monthly fee to listen to music and watch videos, without the interruption of advertising. Other features include the ability to save music for offline listening. The launch of a subscription service is likely to transform the relationship between YouTube, which has around one billion users a month, and the music industry. The free video platform had been seen mainly as a way to promote artists online, rather than a moneymaking proposition in and of itself.