In October 2014, YouTube CEO Susan Wojcicki hinted at the possibility of an ad-free, subscription-based version of YouTube that would run alongside the site’s current ad-based model. Now, thanks to a letter from the world’s largest video sharing site to creators shared by Bloomberg, this service is looking much more certain. In the letter, the Google-owned video site notes it will soon be “offering fans an ads-free version of YouTube for a monthly fee.”
This service builds on a growing number of ad-free experiences already available on YouTube. A paid tier of the site’s YouTube Music Key service removes ads, a growing library of films on Google Play is available on demand, and YouTube previously launched a paid subscription service on a premium channel-by-channel basis (which hasn’t gone so well for the participating channels). It’s worth noting that the site-wide version of the subscription-based service would not replace the pre-roll advertising format of which YouTube is a well-known user. Instead, for a price, viewers who absolutely do not want to see ads will be able to bypass them entirely.
When reached for comment, YouTube provided the following statement:
The addition of a new, ad-free revenue stream wouldn’t just benefit viewers who loathe commercial spots, but could potentially be a big boon for YouTube’s creative community. Online video creators are always looking for new ways to monetize their programming and have particularly voiced concern with YouTube’s favorable to creators and standard 55% – 45% ad split. But the big question is, how would that pile of cash be split among creators?
Jason Kilar‘s shiny new Ellen DeGeneres-endorsed online video platform Vessel charges a $2.99 monthly fee for special access to windowed content. Then Vessel distributes 60% of the revenue generated from those monthly subscriptions among creators with windowed content, based on the percentage of views a creator’s windowed content received during the month. (And that’s in addition to an 80% – 20% split – in favor of the creator – on the platform’s advertising revenue.)
Would YouTube employ a similar tactic? Would it force all creators to participate in the program? Would creators have the potential to generate more revenue from their offerings under the new system? And how would YouTube’s growing advertiser base feel about the platform’s new revenue tactic? These questions and more will be answered in the coming weeks and months, as YouTube is reportedly considering launching the ad-free subscription initiative by the end of 2015. In the meantime, here’s the full text of the letter YouTube sent to its creators:
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