YouTube plans lower-priced, ad-free version of paid video tier

Alphabet's YouTube plans to introduce a new, lower-priced version of its paid video service, offering its vast library of podcasts and how-to clips without advertising. The package, dubbed “premium lite,” will be announced soon in the U.S., Australia, Germany and Thailand, according to a person familiar with the plans. The service will target viewers who primarily want to watch programs other than music videos. While YouTube may be best known for the free videos uploaded by users, the company also offers a variety of paid services. YouTube Premium is a $13.99-a-month package in the U.S. that lets subscribers watch everything on the service, including music videos, without ads. Sign up for Ad Age newsletters From influencer marketing to agencies, get the latest news and analysis delivered to your inbox Click here “As part of our commitment to provide our users with more choice and flexibility, we’ve been testing a new YouTube Premium offering with most videos ad-free in several of our markets,” a YouTube spokesperson said in a statement. “We’re hoping to expand this offering to even more users in the future with our partners’ support.” The change comes at a time of increased competition for the attention of podcast fans, in particular, who have multiple choices for how and where they consume their favorite shows. The premium lite plan has been in testing in overseas markets for months, according to the Verge. But it will now officially roll out more broadly, including in the U.S. for the first time. The new tier could change how content creators, better known as YouTubers, make money on the service. Historically, ad revenue has made up the bulk of their earnings on the platform. This new tier, if widely adopted, could make subscription revenue a larger and more significant part of their business. The rollout follows Spotify Technology SA’s push into video content. Last month, the Swedish company launched a program in which subscribers in certain territories no longer see dynamic ads in video content. (On both YouTube and Spotify, video creators can personally read ads during their videos that can’t be stripped out.) Spotify has said that more than 70% of eligible creators and networks opted into the program, but a significant number of top podcasters have yet to do so over concerns that the new revenue model might not match the amount they are currently making from advertising. YouTube’s lower-priced plan might tempt fans of certain shows who want to avoid ads to stick around rather than heading over to Spotify for a commercial-free version. To watch music videos without ads, YouTube customers will still need to sign up for YouTube Premium. —Bloomberg News Subscribe to Ad Age Sign up now for the latest industry news and analysis Click here

YouTube plans lower-priced, ad-free version of paid video tier

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