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November 12, 2014

YouTube to take on Spotify and Rhapsody following Merlin deal

Deal allows video platform to license music from thousands of independent record labels; an important step towards planned subscription service.

By CBR Staff Writer

YouTube has signed a deal with rights agency Merlin, which represents more than 20,000 independent music labels, in a move which supports reports that a music subscription service is on its way.

The deal will allow the video platform to license music from thousands of independent record labels; an important step towards a subscription service.

YouTube has been in talks with the label for months, even threatening to take down music videos by renowned artists like Adele and the Arctic Monkeys if their demands were not met, reported the Financial Times.

The service is expected to charge monthy fees from subscribers, which YouTube then providing ad free music and video streaming along with music saving features for offline use.

The paid subscription service is expected to compete against Spotify and Rhapsody.

According to media researchers, YouTube is expected to make around $500m in subscription revenue within a year.

The video platform previously signed deals Universal, Sony and Warner to license the music offered by the labels for its subscription service.

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The Financial Times reported Midia Research music analyst Mark Mulligan as saying: "One of the last significant obstacles to getting to market has been removed."

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