YouTube, the online video-sharing website owned by Google has plans to save you from watching the ads before you stream your video. You read it correct! YouTube is about to offer paid, ad-free subscription version. In its attempt to establish as a premium video sharing website, YouTube may adopt a Freemium model where the basic services would be available for free whereas, some advanced options may require the user to pay.
“A paid, ad-free subscription version of YouTube, in addition to the existing ad-supported offering, would give users more choice and work well in a world where viewers are increasingly watching videos through apps on mobile devices,” said Susan Wojcicki, CEO of YouTube. Although Susan did not give any more information about it, she explained she’s trying out different options for the user to have.
In 2013, YouTube gave individual content owners an option to monetize their creativity by offering subscriptions to their channel. It’s unclear how an ad-free subscription model might impact their revenue, especially since it’s estimated that it earned $5.6 billion in gross ad revenue last year. Out of which $1.96 billion was retained by YouTube, while the rest of it went for the infrastructure costs for all that video content it hosts free of charge.
Even though YouTube hasn’t revealed their exact plan, it is clear that the main focus is buying content directly from content creators. Previously, YouTube had invested heavily in its partner programme and content creators like PewDiePie, Bethany Mota and Shane Dawson. A small fee of $2-5 a month depending on their favorite channel doesn’t sound much as it allows the users to access that content without ads, support the content creators and enjoy the channel ad-free.
On the other hand, If YouTube offered itself without ads, it will also have to offer some type of payment to content creators as a major chunk of the revenue for these creators comes from the ads. For Eg: If AIB gets X amount for showing ads before their videos and YouTube’s ad-free version may restrict those ads. YouTube may need to decide how to payback that X amount, i.e how to share their revenue with the content creators.
Conventional video consumption has been increasing over a period of time through different channels like YouTube, Hulu, Amazon and Netflix. Due to which these sites are now the mere publishers of the content, giving power into the hands of content creators. Will the paid model then shift the audience from TV to such mediums? YouTube has begun requesting proposals from online video companies, YouTube creators and production studios for original, TV-quality shows that YouTube would fund. Shifting to a paid-subscription service, and showcasing original series exclusively on YouTube – It surely is competing with Netflix.
There’s no final word on when the YouTube subscription model would be live – or it’s music service that has been rumored for quite some time, Susan made it sound that it may arrive sooner than later.