Six months ago, YouTube CEO Susan Wojcicki said, “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… [consumers] will either choose ads, or pay a fee, which is an interesting model… We’re thinking about how to give users options.”
According to an email to YouTube partners, the Google-owned video service will soon launch a subscription-based model that will give viewers the option to pay a monthly fee to opt out of seeing any ads during video clips. This is good news for viewers, since YouTube has over a billion monthly users, with many simply pressing the “Skip Ad” button to proceed to the content. According to Bloomberg, the ad-free model is expected to launch “by the end of the year” and will cost $10 per month to remove all image, text and pre-roll video ads.
For content creators, YouTube is a source of income and brand exposure. Over 300 hours of video is uploaded to YouTube every minute and YouTube notes that “since 2007 we’ve paid out over $1 billion to partners [content creators].” YouTube partners will not be able to opt out of the upcoming monthly subscription model, but will receive a certain percentage based on “watchtime” for any loss of income.
The terms state, “YouTube will pay you 55% 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.”
YouTube says this route will push them into “uncharted territories.”