YouTube is going to launch an ad-free subscription service, and it is prepared to drop a couple of channels if they don’t agree to the terms provided by the video streaming giant.
Speaking at VidCon, YouTube CEO Susan Wojcicki said that while most content providers were happy with the terms, some did not want to participate in the subscription service. This will essentially offer the same YouTube service, but instead of ad-revenue share, channels will receive around the same amount for a subscription view.
Similar subscription models have been used by Spotify, but YouTube’s video advertising makes a lot more revenue than Spotify. This means instead of making four to five times per view with subscription, channels may make around the same or less with a subscription view.
Of course, the upside of the subscription service is it may push AdBlock users to pay something back to content creators. AdBlock is used on about 20 to 35 per cent of all YouTube videos, a major decrease in revenue for creators.
YouTube plans to make the subscription plan a one-time monthly payment for £10. It already has another subscription service, Music Key, focused on offering audio-only music with no-ads, which can play in the background, for £7.99.
Google has invested major attention on YouTube in 2015, with plans to make the video service even bigger. It already has more than one billion active monthly users, but still the server costs and AdBlock keeps it from making profit.
This new subscription service should alleviate some of these issues, although we cannot see it being the major catalyst to YouTube’s profitability. This will come in time, with server cost reductions, new ways to follow content creators are more monthly payment services.