On the eve of I/O, Google managed to finalize deals with Universal Music Group and Sony Music Entertainment to bring a music subscription service to both YouTube and Google Play, according to a report by The Verge that is now being corroborated by The Wall Street Journal. If everything goes smoothly, a preview or launch of the new service tomorrow isn't out of the question. The Journal similarly says the streaming solution could launch "as soon as this week." That would give Google a substantial leg up over Apple, which is still in the process of negotiating contracts for its own music streaming solution.
Google approached labels about music streaming licenses as early as fall of 2012 and brought Warner Music Group on board in early March. Allegedly, YouTube's popularity was a deciding factor for the remaining two music groups; Google's platform for user-generated video content sees hundreds of millions of views a month, exposure the labels didn't want to turn down. There are actually two separate streaming services in the works: one for YouTube, and one for Google Play, as originally rumored back in March. The Journal and The Verge part ways on whether the YouTube service deals with those labels have actually been cemented, with The Verge claiming they have, and The Journal saying it's "unclear where those talks stand."
The Verge describes the service as "on-demand," offering the ability to stream music to PC, mobile devices, and TV - in other words, more like Spotify than Pandora. The Wall Street Journal's report indicates that it will be a paid subscription model to access "whole libraries of songs," suggesting there may not be a free access model, but hopefully we'll learn more tomorrow during Google's I/O keynote.