• by Laurie Sullivan  @lauriesullivan, November 12, 2014

YouTube announced Wednesday the launch of a subscription service that allows viewers to watch and listen to music ad-free, in the background or offline. The paid music service will compete directly with Apple's Beats Music, Pandora, and Spotify, among others.

Google's video site added a tab at the top of YouTube's Web page just for music running on Android, iOS and on YouTube.com that shows favorite music videos, with recommended music playlists based on preferences and playlists of trending music across YouTube.

Some 83.8 million U.S. smartphone users will listen to music via streaming or direct download in 2014 -- accounting for just over half of U.S. smartphone users, per eMarketer.

When Google initially acquired YouTube, analysts were skeptical about how the company would generate revenue. YouTube will generate $7.2 billion in ad revenue in 2014, up from $5.6 billion in 2013, per eMarketer. After paying back its content partners, YouTube's net ad revenue this year will total $3.24 billion, up from $1.96 billion in 2013.

YouTube said it has signed licensing agreements with major U.S. labels and millions of independent labels to offer audio-only tracks for millions of songs that lack official music videos on YouTube.

Google calls the ad-free service -- which officially rolls out in 2015 -- YouTube Music Key. It will cost $9.99 per month. A promotional price of $7.99 per month is being offered until the service officially rolls out.

The subscription will allow users to listen to songs without ads, play songs on their devices, and download videos to their phones to view offline. The subscription will include access to Google Play Music. The two services will track user listening habits to make recommendations for other music.

Radio listening on digital devices continues to gain in popularity. U.S. adults spend an average of 39 minutes per day listening to radio services on digital devices, up from 32 minutes in 2013, per eMarketer. Today, a majority of that time is spent on Pandora.