Considering how incredibly popular YouTube's content -- including its music videos -- has become with younger consumers in the U.S. and elsewhere, Alphabet/Google's (GOOGL) - Get Alphabet Inc. Class A Report new YouTube Premium service has a pretty strong sales pitch. But true to its name, the service costs a little more than standalone music services do.
YouTube Premium, which was unveiled on Wednesday, provides (like the YouTube Red service that it replaces) ad-free YouTube and access to original YouTube shows such as the popular Cobra Kai. But unlike YouTube Red, it also provides access to YouTube Music Premium, a brand-new music service that's fully integrated with YouTube and comes with standalone mobile apps and a desktop player. The older Google Play Music (supported by Red) remains available for now, but it wouldn't be surprising to see Google pull the plug on it in time.
Supplanting the uninspiring Google Play Music with YouTube Music Premium should address Red's biggest weakness. Together with its other perks and the enormous size of YouTube's user base, this leaves YouTube Premium well-positioned to become a hit.
However, Apple (AAPL) - Get Apple Inc. (AAPL) Report and Spotify (SPOT) - Get Spotify Technology SA Report , who now have over 125 million music subscribers between them, have to be pleased that Google is charging $12 per month for YouTube Premium, rather than the $10 per month it charged for Red. On a standalone basis, Music Premium costs $10 per month, which is on par with what Apple and Spotify charge for their individual music plans.