YouTube To Launch Ad-Free Monthly Subscription Service

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

Why New York Times Switched Its Mobile Revenue Model

Read original story on: The Verge

The New York Times just released an update to its iOS app, NYT Now, that fundamentally altered the prestigious publisher’s business model on the mobile platform. Instead of a subscription-based model priced at $7.99 per month for full digital access, the app is now retooled to be ad-supported, granting all interested readers—with or without subscription—access to an editorially curated selection of articles. In addition, the relaunch of the app is sponsored by Delta airline, with future brand sponsorships to come.

The choice between subscription-based model and ad-supported model has long been a dilemma for media owners to consider when it comes to entering the mobile space. Many prestigious content brands, such as HBO and ESPN, have gone with subscriptions so as to keep their offers consistent across platforms. Yet more and more content owners, especially digital publishers, are starting to realize that the old subscription-based model that worked in print doesn’t translate well in the mobile-first world.

The bottom line here is, the choice between the two revenue models is not so clear-cut. It takes careful evaluation of various factors for brands to figure out which one works for their mobile offerings.