- As of 2019, new original content on YouTube will be available for free with ads, instead of being available exclusively through the company's subscription service, YouTube Premium.
- The goal behind the transmission platform's decision to move its original content outside of its subscription service is to expand its audience and "meet the growing demand of a more global fan base," YouTube said.
- But the move raises serious questions about the future of the premium subscription service of $ 12 a month on YouTube and underlines a long tension within the YouTube business.
It has been less than eight months since YouTube launched its "Premium" subscription service of $ 12 a month, and there are already reasons to wonder if its days are numbered.
YouTube said on Tuesday that its original video programs, including sci-fi dramas and reality shows, will no longer be reserved for Premium subscribers after 2019. Instead, YouTube originals will be available on the site for free, with ads, for everyone.
A YouTube spokesperson told Business Insider in a statement that the decision to move its original content out of its subscription service was to expand its audience and "meet the growing demand of a more global fan base."
But the measure raises serious questions about the future of YouTube Premium.
Access to the originals was one of YouTube Key's key selling points. The subscription product, which combines YouTube Music Premium and YouTube Originals, was launched in May. For $ 11.99 a month, users have access to a Spotify music streaming service, plus a list of more than 100 originals, including "Cobra Kai," inspired by "Karate Kid," and the sci-fi drama "Origin. "
With those originals now available for free with ads, why would someone pay $ 12 a month for YouTube Premium? If you really hate ads, it might be worth it for the ad-free version of the originals. But many people will probably decide that they can live with video ads and opt for the cheapest YouTube Music Premium service for only $ 10 a month.
The YouTube spokesperson would not respond directly to the Business Insider's question about whether he planned to end YouTube Premium.
"The YouTube Premium value proposition remains the same, users who want to be offline, all free YouTube ads and a great music experience without ads will continue to sign up for YouTube Premium, that includes seeing the original YouTube ads for free." said the spokesperson. .
Read more: YouTube's new music subscription service accepts Apple Music and Spotify
The decision is part of a new strategy, said YouTube, where all audiences can access YouTube originals, those who are willing to pay for an experience without advertising and those who are not. The company notes that Premium subscribers will continue to get exclusive access to originals such as "Cobra Kai" that have already been produced (it's just that all the original new content will be available for free in 2019).
Is YouTube's advertising business too powerful to make room for a subscription business?
The YouTube strategy change occurs when Apple plans to launch its own original content transmission service as of March 2019. Apple's service will include a combination of original content and licensing agreements with production companies and is rumored to be Free for anyone accessing it through iPhone or iPad.
But the move also highlights the longstanding tension between YouTube's business with advertising (which generates billions of dollars in revenue each year) and the nascent subscription business. The potential for advertising revenue from Originals video content is so strong that YouTube can not afford not to capitalize on it, even if that means jeopardizing the potential of the underwriting business.
YouTube does not disclose the number of subscribers for its Premium or Music Premium services.
It's a dilemma that YouTube has been fighting for years and, according to some industry experts, that's why YouTube has struggled to create a successful paid subscription service. And judging from Tuesday's move to bring originals outside the subscription payment wall, it seems that the advertising side of the business has won again.