Google’s YouTube is taking another crack at monetizating YouTube beyond advertising with YouTube Red, a new White Glove (Red Glove?) service premium subscription service. Subscribers to YouTube Red get access to an ad free version of YouTube while also adding additional features, like the ability to download videos for offline viewing, run YouTube videos in the background while on mobile and obtain access to exclusive content. The service will cost $9.99 a month and come bundled with the Google Play Music service, Google’s answer to Spotify and Apple Music.
This isn’t YouTube’s first attempt to monetize their service beyond advertising. In 2013, YouTube launched a la carte paid channels program and one year later, they introduced Fan Funding — a service to tip content creators directly without needing to use a third party service. Both products proved to be flops and were consigned to the dustbin. The company tried again last year when it launched Music Key Beta, another monthly subscription service. Music Key Beta was a music videos focused service that also went for $9.99 a month, and also gave users the ability to remove ads and use the app in background modeon mobile (Are we seeing the parallels here). Again the service did not fare well, with the biggest complaint being that it was incredibly inconsistent. Much of what could be considered Music was not covered by the service, leading to a confusing and frustrating patchwork of content that didn’t feel fair to users when YouTube tried and failed to try and narrow it down to such a selective niche.
YouTube Red is an attempt to take the lessons learned from past failures, especially Music Key Beta, and make it a more well rounded and widely appealing product . By taking the foundation laid by Music Key Beta and applying to all of YouTube’s vast selection of content opposed to a specific niche, YouTube is hoping to have a product compelling enough to capture some additional revenue from at least a small percentage of it’s userbase. And it really doesn’t need to be much. Consider that with YouTube’s massive reach, that if only 5% of their US based viewers signed up it would add up to about $1 billion in additional revenue. The difficulty will be convincing even that small percentage of viewers to sign up to a service that has always been free and where much of the added value that it’s subscription is offering can be accomplished with the aide of third party applications and services, which are also free. Red’s largest strength this time around is the bundling of the Play Music service, as well the convenience to access the subscription feature without using that assortment of third party products.
The service will initially be launched October 28th in the US, with the service rolling out to other countries over time. Current US subscribers to Google Play Music will automatically receive access to Red.