What Happened
After months of speculation, YouTube has finally confirmed the launch of a paid subscription service called YouTube Red. Set to launch on October 28th in the US, the $9.99/month subscription service will allow users to watch YouTube without ads, save videos for offline watching, and keep video playback running in the background on mobile. YouTube is also planning to put some new original content created by its top content creators behind the paywall. In addition to the YouTube content, subscribers will also gain access to the entire library of Google Play Music as well.
Market Impact
Currently boasting over 1 billion monthly users worldwide, YouTube has long been the number one destination site for digital videos. Yet it still struggles with turning a profit. Launching an ad-free subscription tier opens up a new revenue stream for YouTube, while also putting it in direct competition with other subscription-based music streaming services. As a distribution platform, the site offers some of the best video ad products in the industry thanks to its scale and support from its parent company Google.
Overall, YouTube Red won’t necessarily reduce the streaming site’s existing ad scale by much – after all, 10 dollars a month is not that cheap – but it could cause a certain high-income demo of YouTube viewers to opt out of seeing ads, therefore costing some brands that specifically targeting this demo their targeted audience.
Source: The Verge
Header image courtesy of YouTube