> Why not make it simple for people and just use one name?

Because YouTube Red is a brand targeted at people who are using YouTube now and want it to be ad free. Google Play Music All Access is a side benefit for that audience.

(Conversely, Google Play Music All Access is an existing product targeting people who want unlimited music streaming -- while the music use of YouTube is somewhat relevant to that audience, ad free YouTube viewing isn't a core benefit to that audience; so with the YouTube Red coming on board and including, and being included by, Google Play Music All Access, you've got one substantive product with two different brands targeted at different audiences.)

I suppose because it's clear what you get with those names.

But it isn't clear because "YouTube Red" is meaningless.

Weren't they trying to divide YouTube from "Google" as well, this kind of doesn't help, but I would either have gone with YouTube Plus or Play Plus, seeing as others pointed out "Red" and "Tube" sounding awful together.

> Weren't they trying to divide YouTube from "Google" as well, this kind of doesn't help

It might, in the long term. The next step after expanding the services offered under Google Play Music subscription and adding a new name for it (without immediately disrupting anything) might well be retiring the old name, moving the whole audio/video streaming product area under the YouTube brand.

So was "Google" until they built up brand awareness.