Websites or YouTube channels where you can find live music are far from new, but Colors has refined their content and viewing experience so much that it feels like something different. Colors Studio is not a music channel, it is an online music venue.
Other examples of online music venues are NPR's Tiny Desk or Jam in the Van.
The studio has a video and music production team on staff. Artist's fly in, play their set (of one song), and leave production and distribution to the studio. The studio's YouTube page is minimalistic, there's nothing there except live single song sets by mostly new or obscure artists.
Their YouTube channel has 4.9M subscribers. The studio was co founded in 2016 in Berlin by two friends, but has since grown to 14 people. For reference, NPR Tiny Desk is 11 years old and currently has the exact same amount of subs as Colors.
Parcels performing at Colors Studio
The YouTube channel posts a video roughly 2 times a week, and averages about 40m views per month. This means they bring in anywhere from $2-4m/year in revenue from YouTube monetization alone. (500M views/year at $4-8/1000 views)
To get a better view of their business model you only need to look to the description that accompanies each of their YouTube videos:
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Revenue streams underlined
Colors makes money from primarily three sources: