Paid Subscriptions, Streaming Music Service May Be Coming Soon To YouTube

Chuck Bednar for redOrbit.com – Your Universe Online
Google’s online video service YouTube is reportedly set to roll out a paid subscription service that would allow viewers to skip advertisements, senior vice president Susan Wojcicki revealed during the Code Mobile technology conference in Half Moon Bay, California on Monday.
Wojcicki, who took over as the head of YouTube in February, said the service would be introduced in the “near term,” but according to PCMag.com’s Stephanie Mlot, the company is not quite certain at this point what form its premium, ad-free subscription service will take.
The new business model would be “a big change from the advertising-only approach” that helped turn YouTube into “into the world’s largest online video website,” said Alistair Barr and Rolfe Winkler of the Wall Street Journal. Offering both a free, ad-based service and a subscription model “would give users more choice and work well in a world where viewers are increasingly watching videos through apps on mobile devices,” they added, paraphrasing Wojcicki’s comments.
Wojcicki said at the conference that she acknowledged there will be instances in which YouTube users don’t want to sit through the ads to get to the content they want to watch. She noted there are several mobile apps and streaming content providers that allow users to either save money and be exposed to ads, or opt to pay to remove those ads. Wojcicki called that model interesting because it gives users a choice.
According to Reuters, YouTube launched a pilot program back in May 2013 that allowed individual content creators to charge consumers a subscription fee for access to a specific channel of videos. The service described by Wojcicki on Monday would expand that to allow consumers to pay a fee to watch YouTube’s entire content library ad-free.
“We rolled out the ability for an individual channel to do a subscription,” the YouTube head explained, according to the Wall Street Journal. “We’ve also been thinking about other ways that it might make sense for us. If you look at media over time most of them have both ads and subscriptions.”
Also on Monday, Wojcicki discussed YouTube’s anticipated streaming music subscription service, which CNET’s Shara Tibken, Richard Nieva, and Joan E. Solsman said is expected to be similar to Spotify with both ad-supported free models and commercial-free paid subscriptions. The reporters said the service is expected to launch before the end of the year, but Wojcicki would not pin down a release date, stating only that it would be released “soon.”
Tibken, Nieva and Solsman said that Google has reportedly been close to launching it on multiple occasions, but that the service has suffered setbacks related to the departure of several key executives and issues with independent music labels. In discussing the service, Wojcicki would state only that YouTube was “working on it.”
“Google’s search and advertising business is still the most dominant in the industry – it generates $50 billion a year in revenue – but some financial analysts fear the business is slowing… So as Google looks to the future, it’s trying to find other revenue sources to make sure it keeps its lead,” said Tibken, Nieva and Solsman. “In the United States, video ad revenues from YouTube will hit $1.13 billion by the end of 2014, according to eMarketer.”
“Google’s YouTube video site is an Internet juggernaut, notching more than a billion unique visitors every month and streaming about three months’ worth of video to viewers every minute,” they added. “All that watching adds up – it’s the No. 1 source of traffic on mobile Internet networks in North America, according to researcher Sandvine, and second only to Netflix on fixed-access networks, like your home broadband service.”
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