Though the popular video-streaming website, YouTube, has notoriously been free, it has managed to be successful by selling advertising. In fact, it was YouTube that popularized pre-roll video advertising, so much so that some users have come to despise these ads.
That put YouTube in a conundrum: keep playing ads they know users don’t like or make users pay a fee and ditch the ads? This is a similar conundrum several social media platforms encounter. Well, YouTube decided to do both. The free, ad-ridden viewing ability still exists, however, YouTube has introduced a subscription service called Red, where users can pay a monthly fee of $10 to not only have an ad-free streaming experience, but also to download videos, access YouTube Music (another new service), access exclusive subscriber-only content such as original series and movies, and more. This puts the video giant in direct competition with existing services such as Hulu or Netflix for video and Spotify or Pandora for music. Chief Business Officer Robert Kyncl stated that advertisers need not worry because 99 percent of the content will remain free to view, and that ad revenue will continue to grow.
When YouTube was created in 2005, it was the first platform of its kind and remains the number one video platform globally, attracting more than 1 billion—yes, that’s with a B—users a month.