A source familiar with the situation has confirmed to The Verge that most of the details in the FT story were accurate. YouTube does not want to launch a paid service and then be forced to show some videos in ad-supported mode, or offer users the ability to take videos offline, but not be able to offer that for big names like Adele or Jack White. It is going to begin blocking artists whose labels have not signed on to its new licensing terms in the countries where those deals apply starting within just a few days, although the paid service is not expected to roll out that soon.
YouTube is a popular site for two reasons. First, it's fairly easy to use. And second, it's got everything. If YouTube is going to start deleting videos because the owners of the videos don't want to do business with YouTube, that changes the deal.
And it's entirely possible that I'm going to eat these words, but who the hell wants a music video streaming service? I can understand the appeal of a music streaming service because it provides a much larger library than the one you own. But who watches videos over and over again? Who wants to waste their phone's data plans on videos when they could stream the songs instead? Who spends a lot of time sitting in front of the computer watching music videos? We mock MTV for not running music videos, but the truth is that an unending stream of music videos is a boring thing. I can't imagine that many people who'd be willing to pay for that privilege.