YouTube Unveils Ad-Free Subscription Service

YouTube Red Costs $9.99 a Month and Is Available Oct. 28

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Google's YouTube unveiled a paid version of its video-sharing service, a new source of revenue for parent company Alphabet Inc. as the internet giant tries to make the website more profitable and fend off competition from other premium content sites.

The new service, called YouTube Red, will cost $9.99 a month and is available beginning Oct. 28, the company said Wednesday in a blog post. Google will try to persuade people to pay for a service they already get for free by eliminating advertisements and permitting subscribers to save videos for offline viewing.

Wringing more money out of YouTube is crucial to the success of the larger Alphabet group, said Jitendra Waral, an analyst at Bloomberg Intelligence. YouTube Red differentiates YouTube from ad-supported rivals like Facebook Inc., and brings Google more directly into competition with paid streaming services from Netflix Inc. and Hulu LLC. Google is tapping into a network of homegrown stars such as PewDiePie, who attained their fame on the platform and have loyal audiences there.

"YouTube is one of the three pillars of Alphabet," said Mr. Waral, citing the economics of ads viewed on mobile devices and new cost controls being introduced by Chief Financial Officer Ruth Porat. A streaming service will be "an additional revenue stream, rather than a surrogate revenue stream," he said.

~~Bloomberg News

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