Google to Launch YouTube Premium Plan Without Music
"Monthly Subscription Fee Set at 8,500 KRW, Lowest Price Ratio Worldwide"
Music Videos Not Ad-Free... No Background Play Support
"Lite Plan Cheaper Than Expected... Some Customers May Switch"
"Limited Features... Consumers Unlikely to Feel Much Benefit"
As Google plans to introduce a new subscription plan for YouTube Premium in Korea that excludes music, attention is focused on the potential impact this may have on the domestic music streaming platform market. Since YouTube Music has maintained its position as the top music streaming platform in Korea, thanks to the influence of YouTube Premium, there are predictions that some users may migrate to other services. However, some also forecast that the limited benefits of the new plan will mean that not many customers will actually switch to other music platforms.
According to the IT industry on July 16, the Korea Fair Trade Commission announced the previous day a provisional consent decree regarding Google’s alleged violation of the Fair Trade Act. The consent decree is a system similar to a 'settlement', where a company suspected of violating the law submits a voluntary corrective plan, and after review, the case is closed without prosecution. According to the provisional plan, Google will launch the 'YouTube Premium Lite' subscription plan, which excludes the YouTube Music app from the ad-free video viewing 'YouTube Premium' plan, within this year.
Comparison of Features Between YouTube Premium and YouTube Premium Lite. Screenshot from YouTube Customer Service.
The main point of contention, the monthly subscription fee for the Lite plan, has been set at 8,500 KRW (for Android and web). However, if users subscribe via the YouTube app on Apple’s iOS, an in-app payment fee applies, raising the price to 10,900 KRW. This is 57.1% of the existing YouTube Premium subscription fee (14,900 KRW), which is lower than the ratio in six other countries where the Lite plan has already been launched, such as the United States and the United Kingdom, making it the lowest in the world. In addition, users who switch from the existing Premium plan to the Lite plan will be offered a two-month free trial.
YouTube Music has dominated the domestic music streaming market, outpacing local platforms. According to WiseApp Retail, an app retail analytics service, as of May, the monthly active users (MAU) of music streaming apps were: YouTube Music, 9.82 million; Melon, 6.54 million; Spotify, 3.59 million; Genie Music, 2.63 million; and Flo, 1.75 million. WiseApp’s analysis shows that YouTube Music has consistently held the top spot in user numbers since the end of 2022.
Industry observers predict that if the provisional plan is implemented and the Lite plan is launched with benefits such as a two-month free trial, some YouTube Premium subscribers may move to other music platforms. The price difference between YouTube Premium and YouTube Premium Lite is 6,400 KRW, and according to the Fair Trade Commission, users can access music streaming services for even less by using telecom discounts or bundled packages.
A representative from the music platform industry said, “Since the price of the Lite plan is set lower than expected, YouTube Premium users who do not use YouTube Music may switch to the Lite plan or move to another music platform.”
However, some point out that the features offered by YouTube Premium Lite provide little incentive to subscribe. This plan only supports ad removal for some videos, which is one of the benefits of YouTube Premium. The YouTube Music app, which is a music streaming service, is not available with this plan.
Furthermore, even for videos uploaded to YouTube, ads are not removed from music videos. Music videos and audio tracks will continue to have ads as before. The 'background play' feature, which allows videos to keep playing even when the YouTube app is closed, and the 'offline download' feature, which allows users to save videos to their device for viewing, are also not supported.
Even when comparing the price of the subscription plan with other music platforms, the incentive for existing YouTube Premium users to switch to other music platforms is low. Currently, among the main domestic music platforms, plans that offer similar features to YouTube Music (support for mobile and PC platforms, offline downloads) are priced at about the same level as YouTube Music Premium (11,990 KRW). The cheapest plans that support only mobile streaming charge in the mid-7,000 KRW range.
From the perspective of YouTube users, it may be more reasonable to pay an additional 3,000 KRW and use YouTube Premium (14,900 KRW). If a YouTube Premium subscriber switches to the Lite plan (8,500 KRW) and then subscribes to the cheapest domestic music platform plan that supports only mobile streaming, they will end up paying 1,000 KRW more than before.
For this reason, there is analysis that the incentive to choose the YouTube Premium Lite plan is low. An industry insider said, “It is understandable that the YouTube Premium Lite plan has been released with the same structure as in other countries, but looking at the set price, it will be difficult for consumers to feel the benefits,” adding, “It is regrettable that the price was not set a bit lower.”
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