YouTube to reportedly launch paid music service in March

YouTube is preparing a new subscription streaming music service that parent company Alphabet hopes will challenge industry incumbents Spotify and Apple Music, according to a report on Thursday.

Citing sources familiar with the matter, Bloomberg reports YouTube's music service, referred to internally as Remix, will debut in March with support from at least one major music label. The initiative is yet another attempt by Google to enter the streaming segment as the internet search giant plays catch-up with the likes of Spotify and Apple Music.

One of the world's top three music labels, Warner Music Group, has already signed on to offer its catalog for the service, the report said. YouTube is also in talks with Sony Music Entertainment and Universal Music Group, though concrete deals have yet to materialize.

Merlin, which represents a group of independent labels, is also said to be in discussions to join YouTube's new product. The consortium inked a deal to offer its music catalog for Apple Music streaming just days before Apple's service was set to launch in 2015.

How YouTube will differentiate its product from existing offerings remains to be seen. The rumored service is said to combine on-demand streaming with YouTube elements like video clips. Apple Music provides a similar experience, offering subscribers on-demand music, a variety of music videos and original content like "Carpool Karaoke" and "Planet of the Apps."

YouTube has come under fire from major music labels for not forking over fair compensation for music streamed through the platform. In addition to official music videos, a number of YouTube users post remixes and other content to their own pages. The practice makes it difficult for YouTube to identify copyrighted music and pay out content owners.

Google first attempted to address the problem in 2014 with YouTube Music Key in 2014, a premium service that offered subscribers access to ad-free music. The project was folded into YouTube Red, which initially put an emphasis on music, complete with offline caching. Red has since been refocused as a vehicle for YouTube's original content.

While YouTube is aiming for a March debut for its as-yet-unannounced music streaming service, the company still faces a number of roadblocks, the report said. Beyond continuing negotiations with Universal and Sony, YouTube must also navigate an upcoming deal with Vevo, which is owned by the two major labels.

Google earlier this year announced plans to fold Google Play Music and YouTube Red into a single entity better positioned to compete with streaming music products from Spotify, Apple Music and other industry leaders.