YouTube launches $10-a-month ad-free video music service


YouTube Red, the online video giant’s anticipated subscription service, provides ad-free access to YouTube’s video library, including music videos, as well as offline downloads. It also includes a subscription to the Google Play Music streaming/offline download service, and supports the newly-launched YouTube Gaming service. The service becomes available on October 28 in the U.S., and will soon afterwards launch globally

Red’s pricing is bound to draw attention – it’s on par with what Spotify, Apple, and others charge for standalone music streaming services – and raises the question of whether Google is choosing to absorb near-term losses on the service for the sake of subscriber growth. Google is giving content providers a 55% aggregate subscription revenue cut (on par with their standard ad revenue cut), and also has to pay music licensing fees.

YouTube has 1B+ monthly active users to cross-sell the service to. Over half the platform’s video views now come from mobile devices, and the average mobile viewing session has grown to more than 40 minutes. 80% of views come from outside the U.S.

Reportedly, YouTube plans to make some of the original content it has financed available only to subscribers. No word yet on whether YouTube will also begin providing licensed material from 3rd-party studios – a move that would put Red into more direct competition with the likes of Netflix, Amazon, and Hulu.


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