It could well be the first step to finally charge for content on the internet. Starting October 28, YouTube, the world’s largest video portal, is launching YouTube Red in the US, which will allow users to view videos without any advertising for a monthly plan of $9.99. This is expected to be rolled out worldwide early next year. It will also allow subscribers to save videos for offline viewing along with access to Google Play Music. Even if just 5% of YouTube’s US subscribers adopt the plan, it will add an estimated billion dollars to annual revenues.
But there is a flip-side for video creators. Any video creator who earns a cut of ad revenue but doesn’t agree to sign its revenue share deal for YouTube Red could have its videos hidden on both the ad-supported and the ad-free platforms—essentially becoming private videos. However, for the paying users, there will be YouTube Originals, which will feature YouTube-bred stars. It is not that the creators are getting a great deal. Under the terms of YouTube Red, the creator will be paid 55% of revenues as compared to Spotify’s 70% and Apple Music’s 71.5%. But considering the global reach it has plus the support of Google, subscription could well become the norm for using a range of internet services. That could create a new set of online stars.