A report from Android Police has revealed that in an APK teardown, there have been multiple instances (see screenshot above) in which YouTube Red was being referenced. However they also note that apart from those instances, the YouTube app and the web interface continue to refer to it as YouTube Music Key, and any search for YouTube red yielded no results.
While it is entirely possible that YouTube Red could be a rebranding of Music Key, as the wording in the screenshots seem to suggest, it is entirely possible that maybe it could simply be a new feature or a rebranding of a feature. However Android Police claims that they have since received multiple tips that “confirms” that it is a rebranding.
In any case Google has announced an event for the 29th of September. It is largely believed that the event will see the launch of the new Nexus phones, but at the same time we wouldn’t be surprised if Google announced some changes/updates as well to some of their services.