How much would you pay to never see another YouTube ad again? That’s the question that YouTube is asking as the video giant once again considers launching an ad free version of the platform with paid subscriptions. That’s what YouTube CEO Susan Wojcicki told the assembled audience at Recode’s Code/Mobile conference yesterday.
This isn’t the first time that YouTube has toyed with the idea of subscriptions. Back in 2013 the platform offered individual content creators the option to sell subscriptions to their channels rather than relying on ad revenue. Only a handful of creators took the bait, presumably fearing backlash from fans who were accustomed to receiving content for free. A number of those creators have since dropped out, but at least count 222 channels, most notably premium versions of existing channels like The Young Turks Plus, rely on paid subscriptions. For their part YouTube has stopped actively promoting the option, choosing to focus instead on new tools like its fan funding “tip jar” to help creators generate revenue.
The new plan would bypass individual creators with a separate paid version of YouTube that is totally ad free. Beyond that, few specifics are available. According to Wojcicki the plan is still in its early stages meaning that no major details have been finalized. However, she did stress that historically most media that started off ad funded has eventually transitioned to a subscription based model. It’s the path followed by both print journalism and more importantly, competing video services like Netflix and Hulu.
Though Google doesn’t publish earnings numbers for YouTube the platform is estimated to clear $1.1 billion in advertising dollars this year. That hasn’t stopped Wojcicki and her team from looking for new ways for the platform to grow and change. This announcement, appropriately, comes on the heels of major changes to YouTube’s content division that are expected to bring a new wave of premium content to the site. Upping YouTube’s content game is a logical first step, offering something new rather asking people to pay for what they’ve previously received for “free.”
So is a two tiered YouTube in our future? And how would an ad-less YouTube pay content creators? Currently YouTube splits ad revenue with creators taking a fixed 45% cut from every video. A subscription-based service would mean more regular income and the possibility of better rates for creators. Of course that’s only if YouTube can convince a significant chunk of its users to start paying for content with their dollars instead of with their ad views.