This just in. Rumours are abound that YouTube is planning on starting an on-demand music service that works kinda like Spotify – but with music videos. In a bid to keep up with the times,  they’re pitching the new service to mobile users specifically. What’s more, they’re going to offer the service in two forms – a free service, and a premium one.

The premium version would allow users to save the stuff they want to watch, cache it, and watch it offline. It will also offer the user the ability to remove pesky ads (finally). However, the premium service is more of a gimmick, as YouTube really wants to bump the free version, and thereby continue making cash dollar from the ads.

Despite these rumours, YouTube are being coy on what’s really going on:

We’re always working on new and better ways for people to enjoy YouTube content across all screens, and on giving partners more opportunities to reach their fans. However, we have nothing to announce at this time.

YouTube has already secured most of the licenses it needs to set up a proper music service, mostly thanks to parent company Google. So far they’ve managed to get Warner Music Group, Sony Music Entertainment and Universal Music Group – which pretty much accounts for all the artists we hear anyway.

But why should we pay for something that was free in the first place? YouTube had better offer something pretty nifty in order to justify a monthly fee of around $10.

One possible solution is the streaming of full albums. Generally, musicians only upload a one or two videos per album – but a paid subscription service would allow users to stream whole albums.

We’re not sure, but paying a subscription fee each month to remove the ads seems like a bargain in itself.

[Source : Billboard]