YouTube Introduces New Subscription Service Format

27 Sep 2015 | Author: | No comments yet »

AdBlock Pressuring YouTube into a Paid Subscription Model.

YouTube might be launching its long-awaited subscription service as soon as the end of October, according to Recode. We all know YouTube has been planning to launch a completely ad-free subscription, but the details have been sorely lacking on things like how much it will cost, what will be included, and when it will launch.YouTube announced today a plan to introduce a paid subscription model to its users, offering music and ad-free videos to its users for a $10 subscription fee.What’s more, the e-mail mandates that content owners must agree to the terms by October 22, or their “videos will no longer be available for public display or monetisation in the United States”. “To give fans more choice we will be launching a new ads-free version of YouTube, available to fans for a monthly fee,” reads the alleged e-mail. “This service will create a new source of revenue over time that supplements your advertising revenue.” It continues: “That’s why we’re asking you to update your agreement to reflect the updated terms for the ads-free service…To accept, simply log into YouTube.com as “username” from a desktop or laptop and follow the prompts by October 22nd.” The report suggests these two services will be YouTube’s existing Music Key music service – currently in beta – and another service, “yet to launch”, the will remove ads.

The video-sharing website has long since had plans to offer more options for its viewers, as it has been working with the idea of offering a subscription service since past year. However, there is a risk that YouTube may struggle to woo paying users who are already signed up to one of a growing number of paid subscription services. It has grown into its own industry that provides a possible path in life for some content creators, who spend their time making videos and keeping one eye on their subscribers. The subscription is expected to run for $10 / month and would completely remove all paid advertising from YouTube and include the current benefits of Google Play Music Unlimited. Google-owned YouTube looks to be in the final stages of launching its subscription service, and a report from Re/Code claims the date to mark on users’ calendars may be October 22, 2015.

For instance, someone who already has a paid Netflix plan, a Spotify Premium account, and Amazon Prime for deliveries could find it difficult to justify shelling out for another recurring charge. “We are progressing according to plan to provide fans more options in how they enjoy content on YouTube. In the email, it’s noted that 95% of partners have signed up so far, and given the side-effects of not doing so, that’s not too much of a surprise. Rumors about a premium service option have circulated for years, particularly after the first report of a music-focused streaming subscription surfaced, which ultimately became YouTube Music Key. We have support from the overwhelming majority of our partners, with over 95% of YouTube watch-time covered by agreements, and more in the pipeline about to close.” So it’s unclear how the company will make money from the twofer, especially since it reportedly had trouble locking down deals for its ads-free model earlier this year.

But some critics argue that the price point (which, if you currently use streaming audio services like Spotify, you are aware is competitive with the industry standard) is too cheap as it would likely only barely cover the cost of music rights. “As you heard in our previous emails, we want to ensure that fans who choose to pay for an ads-free experience can watch all the same videos that are available on the ads-supported experience. Note that YT only gave providers until October 22nd to agree to its new terms and didn’t actually confirm if the service is going live the same day — you might have to wait a bit longer before you can throw money at the website.

Re/Code’s sources claim that is because YouTube will be bundling in an update to its Music Key service, as well as a brand-new service that would allow users to enjoy an ad-free viewing experience. Keen to do more than simply break even, YouTube has for some time been looking to incorporate a subscription-based offering, previous year launching Music Key that brings ad-free music, background play, and offline access to the platform. As Music Key was supposed to cost $10 a la carte, the rumored monthly subscription fee of $10 sounds like a bargain, with music labels and copyright owners due to collect the majority of those fees. Google pays AdBlock Plus around $25 million per year to get on the extension’s whitelist, which lets Google’s ads through for users with the default settings.

Of course, ad blockers present an even bigger problem for Google’s video platform YouTube, which relies on its content creators to bring content consumers to the website. You’ll get to keep your current user name (as long as it doesn’t contain invalid characters, in which case you’ll have to go through a few extra steps to make the transfer), and all your old comments will eventually (not immediately) migrate with you. This was due to the fact that, for many creators, YouTube is their main source of income, so losing ad revenue would hurt both themselves and their channels. For now, it’s a question of whether or not users will be willing to shell out $10 a month for the extra perks of being a YouTube subscriber, or if they will just download ad blockers like they have in the past.

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