YouTube has announced its readiness to launch an ad-free subscription service this year and industry experts see it as a move by YouTube to compete with Netflix and Hulu.
In an email sent to video content creators, YouTube said users will be able to watch content without sitting through advertisements. This move according to the company will give consumers a more personalized experience when streaming content. The email also stated that a new source of revenue will be generated which will supplement fast growing advertising.
An offline viewing service is also likely to be included as an encouragement to lure consumers to sign up for the monthly fee service.
While the paid subscription option will give the average consumer more choice concerning their YouTube experience, it also restricts choice for video content creators — who will need to accept the new terms or potentially face having their videos set to private.
YouTube’s updated Partner Program Terms says:
“YouTube will pay you 55 percent of the total net revenues recognized by YouTube from subscription fees that are attributable to the monthly views or watchtime of your Content as a percentage of the monthly views or watchtime of all or a subset of participating content in the relevant subscription offering (as determined by YouTube). If your Content is included in and viewed by a user in multiple subscription offerings,
YouTube will pay you based on the subscription offering with the highest amount of net revenues recognized by YouTube, as calculated by YouTube.”
This means that a slice of total net revenues collected through subscription fees will be given to YouTube content creators associated with their video. Estimation of the rate should be around $10 based on YouTube’s Music Key subscription service, which offers millions of songs stored by Google for $9.99 per month — and also offers offline access.
