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YouTube proposes 'Premium Lite' plan severing music service over FTC 'bundling' probe

Published: 15 Jul. 2025, 16:43 Updated: 15 Jul. 2025, 18:09

Kim Moon-sik, the director of the Fair Trade Commission's market surveillance department, briefs reporters at the government complex in Sejong on July 15 about the commission’s investigation into YouTube’s alleged “bundling” of its music service. [NEWS1]

Facing regulatory heat in Korea, YouTube is offering a stripped-down, ad-free plan — without the music — to sidestep antitrust penalties and appease local authorities.

YouTube has proposed launching a new “Premium Lite” subscription service that would remove ads from videos at a reduced price of 8,500 won ($6) per month on Android and the internet and 10,900 won on iOS.

According to the Fair Trade Commission (FTC) on Tuesday, Google and other YouTube-related entities have submitted a remedial proposal that includes this plan. The proposal allows a company under investigation for violating the Fair Trade Act to voluntarily rectify any practices of concern and close the case without an official ruling on illegality.

The existing “Premium” subscription — priced at 14,900 won for Android and the web and 19,500 won on iOS — removes ads and includes access to the company’s music streaming service, YouTube Music.

Critics have accused the platform of bundling the music service with its ad-free video plan, saying it limits consumer choice and harms domestic music streaming platforms, which spurred the FTC to open an investigation in 2023.

A silhouette of a mobile user is seen next to a screen projection of the YouTube logo in this illustration from March 28, 2018. [REUTERS/YONHAP]

In an effort to avoid penalties, YouTube has submitted a proposal to introduce the Premium Lite option as a corrective measure. The new plan excludes YouTube Music and slashes the fee nearly in half.

Premium Lite would remove mid-roll ads from most videos, though ads would remain for music content such as music videos. The plan does not offer background play or offline downloads, unlike the full Premium plan.

The proposal also includes a pledge to keep the price of Premium Lite unchanged for at least a year after launch and maintain the price ratio between Premium and Premium Lite at one of the lowest levels globally for four years. YouTube will also freeze Premium pricing for one year.

The company will offer two-month free trials for new subscribers or those switching from Premium to Premium Lite within its 7.5 billion won budget range, and prepare another 7.5 billion won for a support program for promotional discounts through reseller partnerships.

Furthermore, the platform committed to investing a total of 15 billion won in Korea’s music industry, including efforts to discover and promote emerging artists and help them expand internationally.

The FTC will collect feedback on the proposal from related ministries and stakeholders until Aug. 14. Afterward, it may be revised and reviewed by the commission’s plenary session before a final decision is made. If approved, Premium Lite is expected to launch within 90 days of approval.

A person looks at the YouTube logo at the Google For Korea 2023 event held in Jung District, central Seoul, in 2023. [YONHAP]

The FTC expects the process to be completed as early as November, or by the end of the year at the latest.

If rejected, the FTC will resume its investigation. Even after approval, YouTube could face fines of up to 2 million won per day or renewed scrutiny if it fails to honor the company's commitments without valid justification.

The domestic music streaming industry expects shifts in user rankings across platforms following YouTube’s proposed consent decision. The belief is that some current YouTube Premium subscribers may switch to other music services, given the price gap of 6,400 won between the existing Premium plan and the proposed Premium Lite. With telecom discounts and other promotions, alternative music streaming services could be more cost-effective.

According to the FTC, there is a segment of users likely to either switch from YouTube Music to another service or subscribe to Premium Lite while using a separate music streaming platform.

Market tracker WiseApp Retail estimated that as of May, the top music streaming apps in Korea by monthly active users were YouTube Music at 9.82 million, Melon at 6.54 million, Spotify at 3.59 million, Genie Music at 2.63 million and Flo at 1.75 million. Since WiseApp Retail began releasing music streaming insights in 2021, YouTube Premium has held the top spot in user numbers since the end of 2022.

“The core features of YouTube Premium are background play and offline downloads," a music streaming platform industry insider said, noting that with the possibility of losing such features, "Most users have little reason to downgrade even with a lower price.”

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY KIM MIN-JOONG [[email protected]]