YouTube recently launched Red, its new ad-free subscription option, in the U.S.
For $9.99 per month, subscribers can now watch videos without ads, save videos for offline viewing and keep videos running in the background while using other apps on mobile devices.
Subscribers also get:
- Access to new, exclusive video content,
- A subscription to Google Play Music streaming service, plus
- A free set of stainless steel steak knives.
Just kidding about the steak knives.
The short answer to whether the subscription service will kill YouTube ads is, "No." But clearly, YouTube is leveraging its unique ecosystem, market dominance and sheer scale to try and supersize revenue while expanding monetization options for content producers in the face of competition from Facebook and upstarts like Vessel to lure them away.
In an interview that ran last week in The Verge, YouTube chief business officer Robert Kyncl expressed hope that revenue from Red subscriptions will help YouTube transform its unique brand of talent and content into something that appeals to a wider audience.
“What’s happening is that the Internet is doing to cable what cable did to broadcast. It’s just broadening the set of choices," says Kyncl. "You have to really learn how to function in a fragmented world. I think that YouTube is incredibly well positioned for that world."
“Red Dawn,” by Ben Popper | The Verge | October 21, 2015
Subscriptions Complement Ads?
Kyncl also suggested that instead of cannibalizing YouTube’s advertising business, Red will complement it.
"We believe in the advertising business. Ninety-nine point nine percent of the content on YouTube will be free, as it always has been," he explained. "So the world that all of our advertising partners are used to remains alive and well and [watch time] continues to grow at an astonishing 60 percent year over year. There is nothing we are taking away from there, merely adding onto it."
TrueView Ensures Long Term Viability of YouTube Ads
The biggest challenge to Red’s growth may well be the user-friendly format of YouTube’s TrueView skippable ads, which account for 85% of all ads run on YouTube. TrueView’s “Skip Ad” functionality greatly lessens the annoyance factor, one reason why it’s so popular with advertisers.
When viewers aren’t forced to watch ads and can skip them after five seconds, the demand for $9.99 per month ad-free subscriptions is likely to be significantly less than in other environments—like Hulu, for example. It also helps explain why YouTube is bundling those additional benefits in Red. And depending on its adoption rate, throwing in a set of steak knives might not be so far-fetched.
Want to see how Sightly does TrueView better than anyone? Just click here: