Since Susan Wojcicki became YouTube’s CEO in February 2014, she has overseen a number of changes that have increased ad revenue and improved the overall morale of the site’s creative community. Now, she’s considering another change that would further her mission. At the Code/Mobile conference, Wojcicki noted that YouTube may soon offer a subscription-based service that offers at ad-free YouTube experience.
Details are still sparse, but it is likely the service would resemble Spotify’s premium service, which gives paying customers the ability to stream music without needing to pause for ads. This would provide content creators with an alternative revenue stream, one that would not be reliant on volatile CPMs.
“We’re early in that process, but if you look at media over time, most of them have both ads and subscription services,” said Wojcicki. “YouTube right now is ad-supported, which is great because it has enabled us to scale to a billion users, but there’s going to be a point where people don’t want to see the ads.”
This isn’t YouTube’s first dance with the subscription-based model. Last year, it offered a service through which content creators could offer premium content behind a paywall. That offering proved unpopular; most YouTube viewers were not interested in paying for content when they had so many free options available to them, and almost all of the channels included in the premium lineup struggled to make money.
Another subscription-based service in YouTube’s pipeline is YouTube Music Key, which has been stuck in development hell for more than a year and has reportedly caused infighting among the team in charge of its launch. That service is also expected to offer an ad-free experience to paying subscribers, and it could be launched within the next few weeks.
Can Wojcicki find a subscription-based model that works? It won’t be easy, but if she can pull it off, she’ll win even more support for YouTube’s creators while putting more money in their pockets.
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