YouTube is launching a paid subscription service in the U.S. that will strip its videos of ads and steel the Google Inc. service against growing competition from both audio- and video-streaming competitors.
The service, called YouTube Red, was announced Wednesday and will launch Oct. 28 at a cost of $9.99 (U.S.) a month. In 2016, the service will begin rolling out exclusive series and movies for its members. The Internet giant also announced a new app called YouTube Music in conjunction with the subscription service that will focus, as with streaming-music competitors Spotify and Apple Music, on discovering new songs based on consumers' existing tastes.
YouTube Red is the latest in a series of incremental steps for Google to persuade consumers to pay for video and audio content, and to do so across all devices. YouTube is already the Internet's pre-eminent source for streaming both video and music, but the Netflixes, Hulus, Spotifys and Apples of the world threaten to chip away at that dominance.
Last November, Google launched a beta of the $8-a-month YouTube Music Key service that was specifically geared toward music videos. YouTube Red, which applies across the entire video service, will come bundled with the Google Play music-streaming music service, much like Music Key did. Users will be able to download content to their mobile devices to view offline or to listen in the background, as they can on audio services such as Google Play, Spotify, Tidal and Apple Music.
The latter three music services have begun this year to offer exclusive video content and highly personalized experiences. In launching YouTube Red, Google is trying to persuade its millions of users to buy into the convenience of sticking with its brand.
(Thanks to the iPhone and the iTunes store, Apple Inc. already has a lock on hundreds of millions of music fans worldwide, although it was late to the streaming game; CEO Tim Cook said this week that Apple Music had 15 million users, which is strong growth after a June launch, but small when compared with Spotify's 75 million.)
The original video content, meanwhile, pits YouTube more squarely against subscription video services, such as Netflix and Hulu. The first round of content leans strongly on existing YouTube celebrities, including PewDiePie, who has nearly 40 million subscribers, and Toronto's Lilly Singh, better known as Superwoman, who has close to seven million subscribers.
These stars, many of whom built their careers on a shoestring, have rabid fan bases that are crucial to keeping users on YouTube. But as YouTube fame is crystallizing as an accepted form of celebrity, they could also easily be lured away by other services by promises of bigger content budgets or scripted shows. Paid subscriptions could help bring more money in to keep these stars on the service where they started, and also legitimize YouTube as a full-on media company, rather than simply a video player.
A YouTube spokesman said there were no details yet on a Canadian launch. YouTube Red, he said, will launch only in the U.S. first, with "other major markets" to follow within the next year.