YouTube will increase the number of ads viewers see in between music videos, according to the company’s global head of music Lyor Cohen has told the Bloomberg. This is intended to direct users who treat the platform as a music service, to a subscription-based model.
YouTube plans to launch its paid subscription service soon. The ad changes are likely to affect those who use the video streaming site to passively listen to music, keeping songs running after hitting play once.
YouTube said in a statement,”Our top priority at YouTube is to deliver a great user experience and that includes ensuring users do not encounter excessive ad loads. We do not seek to specifically increase ad loads across YouTube. For a specific subset of users who use YouTube like a paid music service today – and would benefit most from additional features – we may show more ads or promotional prompts to upsell to our paid service.”
YouTube’s “free” service model has arguably led to its popularity the world over, especially in markets where users shy away from paid services. The video streaming website’s push for its subscription-based model has the potential to alter internet trends, as it is one of the largest open providers of free music.
This shift in its business model is a result of the music industry’s beef (especially in the US and UK) with YouTube. A report by International Federation of the Phonographic Industry called the video streaming a threat to the music industry last year. The UK industry revealed that artists earned more from vinyl sales in 2016 than they did from YouTube payments for viewings of music videos. This has led to accusations on the company for pocketing larger shares of revenue and not paying enough to artists. Subscription-based music service Spotify paid record labels about $2 billion in 2015, twice as much as YouTube, which is eight times its size.
“YouTube is working with the music industry to bring more money to artists, labels and publishers,” said a spokesperson told The Guardian last year. The upcoming changes seem to be in line with this.
Indian have turned to music and video streaming with the growing availability of cheap data. However, most still use free services. While currently, most OTT players are generating revenue through ad-supported models, they are devising product and service offerings that lure free users to become paid subscribers. Both Gaana and Saavn which are the leading online music service providers in India, have adopted hybrid monetization models and offer limited period trial premium pack experience to their first-time users.
Amazon Prime Music, which is available along with other paid-for services under “Prime” also recently launched in India. Increasingly popular Spotify is also working on its launch here, the company’s CEO has confirmed. Apple Music is also available in India for a subscription fee of Rs 120 per month.