The information comes from sources who do not wish to be identified, but Bloomberg says they are ‘familiar with the matter'. YouTube is allegedly talking to Sony Entertainment, Universal Music Group, and Merlin.
However, it's worth noting that YouTube has tried such tactics before. In 2014, YouTube Music Key was introduced, delivering ad-free music videos. Today, users can make use of YouTube Red or an adblocker for the same functionality.
It seems the new service, known tentatively as Remix, will be closer to Google Play Music. Remix will offer on-demand audio streaming, but will incorporate YouTube elements like video clips. It would have to compete with Spotify and Apple music, but those in the music industry are hopeful.
Better Compensation for Artists?
Spotify faces constant criticism over its poor pay for artists and labels. YouTube may be able to offer more significant compensation. It also seems the time is right, with the music industry returning to growth and YouTube's ad-based model running into problems.
However, sources say there's still a lot of work to do. YouTube has allegedly been in talks with Sony and Universal for over a year. Still, Vevo, a video arm of Universal, is set to negotiate early next year.
At this point, it's hard to say if Remix will be enough to shake up the industry or will just be another of YouTube's attempts. This time, the company has a lot of manpower behind it, hiring a huge amount of Play Music staff, as well as former Warner Music exec Lyor Cohen.
Either way, consumers will have more choice, and Spotify more competition. We'll keep you updated with more information as it arrives.