YouTube is introducing subscription services for the first time this week, offering users the option for an ad-free version of its service and exclusive access to content for ten dollars a month. The glitzy media event to launch ‘Red’ was a long way from YouTube’s humble beginnings with home videos. These days the service boasts more viewers, for longer periods than almost any network in the world. The company had negotiated heavily with creators and partners to offer the new alternative across its entire platform. Users who elect to pay the subscription fee will have access to every video available ad free. This also sets Red apart from any previous attempts from YouTube to offer ad-free content or even additional monetization features for creators. All those past attempts met with confusion when introduced to only parts of the platform.
While the company is vehemently denying that introducing subscriptions put YouTube into the same business as Netflix and Amazon Video, the $9.99/month price tag and new moves towards content production with ‘Originals’ seem to indicate otherwise. Netflix recently raised its prices to $8.99/month and Amazon Video is available with Prime membership priced at $99/year.
A YouTube Red subscription will come with additional content via Google Play Music and added features such as background and offline playback. Consumers signing up directly from the iOS will pay a premium as Apple charges a percentage from all in-app purchases and YouTube is passing that straight on to consumers. Avoiding the additional charges looks to be straightforward since the subscription is multi-device.
Meanwhile, advertisers who use the platform are voicing their concerns regarding audience numbers. To address these, YouTube’s chief business officer Robert Kynci ran the numbers. Even if all the cable subscribers in the US adopted YouTube’s new service (about 100 million people) it would still only represent about 10% of YouTube’s audience. And that’s only if the service was an astronomical success. In the near term, advertisers can expect business as usual.
We’ll be keeping an eye on developments as the service launches, stay tuned for updates – just don't accidently mistype the URL.