YouTube is going to start a music mp3 streaming service on mobile devices.

Google is planning to turn YouTube into a music streaming service on mobile, reportedly to compete with Spotify and Pandora.

This could significantly increase YouTube's already important role in the music market, based on the success of YouTube sensation Rebecca Black, Justin Beiber, and even Psy.

Three major record labels, Warner, Sony and Universal, are negotiating with YouTube to bring their music to the new YouTube service.

The negotiations also reportedly include the release of Android's Google Play as a major streaming option.

Like Pandora, YouTube music streaming would offer free and subscription-based plans.

Free users would reportedly have only limited access to the available music. Record labels are reportedly still deciding what will be included in the free use terms. If YouTube can make access free for mobile users, it could create sales on par with Apple's iTunes.

According to Inquisitr, the advantage of free music streaming on mobile is that users can download or purchase songs they like. This point is what Pandora is missing: subscription users can listen without ads but have no option to purchase the song.

In this sense, Google's YouTube already has an advantage over Pandora, since it doesn't depend on music sales or unlimited music streaming to make a profit.