YouTube Offering Ad-free Paid Subscription Model

The first video in my 100-week Song a Week project, posted to YouTube in 2011.

I got a very interesting email from YouTube yesterday afternoon. The first paragraph highlighted YouTube’s recent successes, including YouTube Music Key Beta and YouTube Kids, and then I read this:

We’re excited to build on this momentum by taking another big step in favor of choice: offering fans an ads-free version of YouTube for a monthly fee. By creating a new paid offering, we’ll generate a new source of revenue that will supplement your fast growing advertising revenue.

I am a YouTube Partner, although my 100+ YouTube videos have yet to earn me even a nominal amount of money (probably because my most-viewed video only has 7,363 views). “Fast growing” is not quite how I’d describe my YouTube money-earning adventure, and yet I understand that YouTube is not actually addressing me, though they are using the word “your” to elide over that fact.

They’re also eliding over how, specifically, I and the other Partners will earn money from this new subscription model. All I know from this email is that “we’re confident this latest contract update will excite your fans and generate a previously untapped, additional source of revenue for you.”

Well, great! I look forward to this previously untapped, additional source of revenue! Honestly, I suspect I will continue to get only tiny slivers of money from YouTube, and I don’t expect anything more.

But what about the rest of us? Are you going to take the option to pay what The Verge describes as “a price expected to be around $10 a month,” and watch YouTube without ads? I mean, honestly, aren’t YouTube ads the worst?

I’m very curious about the math behind this; whether YouTube is going to make more money from this $10 subscription than it would make from an average user’s ad-watching, and whether this truly means that, for all the ads I watch or skip on YouTube, they make less than $10 on my ad-watching activity. Or maybe the $10 is a loss leader, and they’re willing to take the hit on the assumption that we’ll watch more YouTube videos and stay on the site longer without having to skip over ads. (If an average YouTube video is 4 minutes and 20 seconds long, and you can skip an ad after 5 seconds, how many more YouTube videos can you watch in an hour without ads?)

I’m also very, very curious about how much money YouTube Partners will make on their videos. The Verge reports that Partners will be able to make their videos paywall-only, which was not included in the email I got from YouTube, and I will not be surprised if paywall-only videos receive higher percentages of the subscription money than non-paywall-only videos.

I will also not be surprised if I have to agree to new terms to keep my YouTube Partner status, since that’s pretty much what happened when YouTube announced Music Key earlier this year. To quote Billboard, in a story about musician Zoe Keating and her frustrations with Music Key:

[Keating] can sign the contract and allow YouTube and Music Key access to her entire catalog, along with the contract’s other provisions, allowing her to make money from its presence on the site. Or she can refuse the contract and leave her music unmonetized on YouTube.

We have yet to see what will happen with this YouTube subscription service (anyone want to take bets on what they’re going to call it?) and I’m pretty sure that no matter what, people will keep putting up videos and a bunch of well-known content creators will publicly state that their videos will never go behind a subscription paywall.

Meanwhile, it’s Bloomberg’s story on the YouTube subscription model that gives us the most hilarious quote:

“We’re increasingly moving into an age where consumers are learning to avoid advertising,” said Rich Greenfield, an analyst at BTIG. “Between DVRs, Netflix and now Amazon, we’re increasingly learning to lead an ad-free life.”

You know what used to be ad-free? YouTube.

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