YouTube to Launch Ad-Free Subscription, Strongly Encourages Video Makers to Fall in Line - The UpStream

At the end of last year, rumors started swirling that YouTube would launch an ad-free subscription model for its videos. Well, fast forward a handful of months and in my inbox is an email from YouTube about this exact thing. The bigger issue here is how the video platform is forcing content creators to accept the ad-free model.

The letter from YouTube tries its best to hide the news.

Dear YouTube Partner,

Your fans want choices. Not only do they want to watch what they want, whenever they want, anywhere, and on any device they choose, they want YouTube features built specifically with their needs in mind. Over the past several months, we've taken bold new steps to bring these experiences to life. Since inviting hundreds of thousands of fans into our YouTube Music Key Beta, we've seen tremendous engagement. And we've seen an equally enthusiastic response for our new YouTube Kids app, designed to give families a simpler and safer video-viewing experience- it's already crossed 2 million installations in less than one month.

We're excited to build on this momentum by taking another big step in favor of choice: offering fans an ads-free version of YouTube for a monthly fee. By creating a new paid offering, we'll generate a new source of revenue that will supplement your fast growing advertising revenue.

So what's next?

Launching a new paid offering will require us to update your terms through your Creator Studio Dashboard-a process that should feel familiar to anyone who went through a similar process three years ago when we began distributing and monetizing your content on mobile devices. Today, mobile represents over half of all watchtime and mobile revenue is up 200% in the last year. Just as with mobile, we're confident this latest contract update will excite your fans and generate a previously untapped, additional source of revenue for you. Please look out for our notification, review it and let us know your thoughts.

It's an exciting year for YouTube, as we push ourselves into uncharted territories. But we continue to be guided by a desire to deliver the choices fans want and the revenue you need. By working closely with you, we know it'll be a successful journey.

The YouTube Team

Expected to launch in the second half of 2015, YouTube is doing everything it can to make sure each and every monetized video has the option to be ad-free. All YouTube partners will have to allow YouTube to place its video underneath the new subscription model. If a partner decides not to, the video will be listed as private, which means that the only people that can see them are those the creator selects. Obviously this is not a preferred option for creators.

The good news is that YouTube will also give partners a cut of the subscription income, and the videos are not locked into an exclusivity deal with YouTube. However, critics of the change say they should have a choice in placing a video underneath the ad-free umbrella. And while I agree that choice is a good thing, the hand being forced should only help video makers. As it stands, approximately half of all potentially monetized YouTube views aren't paid out due to ad-block software. Perhaps the switch will entice people to pay the monthly fee, thus giving more potential revenue to the creator. The other benefit is that this won't affect interstitched ads, at least not from the FAQ on the matter.

You mentioned ads-free. Which ads are you referring to?

When we refer to an ads-free experience we are specifically referring to YouTube advertising formats. There are no changes to any other agreements that you may have in place, which may include things like product placements or branded advertising within your videos.

This means sponsored videos or other forms of advertising aren't affected and can still be created, essentially putting ad-laced videos under the ad-free service. But those videos, at least for YouTube, are far less common given the landscape of the platform. YouTube added that it will be giving video creators 55 percent of all revenue generated from the ad-free subscriptions. In the end, this could be a win for the makers, but only if enough people get on board with the service.