As YouTube searches for ways to generate more revenue, the
company is currently developing a paid-subscription model that would allow
users to avoid having to watch ads before watching a video. YouTube executives
believe that a paid, ad-free subscription version of YouTube would give users
more options for what they want their YouTube experience to look like.
Additionally, the executives also feel that the model would work well because
users are increasingly watching YouTube videos through apps on mobile devices,
the implication being that while desktop and laptop users may simply view
YouTube’s ads as a nuisance and are willing to put up with them, the ads may deter
some mobile users from going to YouTube.
On the surface, this seems like a pretty common sense move
for YouTube. While it’s impossible to know the exact number, one would think
that there is a contingent of people who love YouTube and are willing to pay a
small fee to not have to watch ads, much like there is a contingent of people
willing to pay Spotify to listen to music without ads. Furthermore, YouTube has
already dipped its toes in the water in this area, as they recently allowed
content providers to create their own subscription-based channels on the site. Lastly,
while we don’t know the exact costs, it’s hard to believe that developing and
offering this model will be a major expense for the company.
The key to all of this for YouTube is an effective rollout
plan, and perhaps the most important aspect of the rollout will be to emphasize
to users that the free, ad-supported model will still remain in place and that
there will be no degradation in quality. Additionally, YouTube also has to
ensure that users don’t feel that YouTube is pushing more ads on them in an
attempt to get users to start paying for a subscription. If YouTube is able to
roll this out effectively, I think it could be a relatively simple and profitable move for YouTube.
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