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0 pointssltkr10mo ago0 comments

This is too simplistic. Youtube started as an ad-supported service and today ads still generate the lion share of Youtube's revenue. Youtube ads are some of the most expensive to buy; Google has no incentive to push viewers off the ad-supported tier.

Google wants you to watch ads OR pay for a subscription, but it doesn't necessarily care which; they make money off you either way.

The reason Youtube offers a premium tier at all is to cater to the minority market of time-poor money-rich users who would rather pay than watch ads, which is just a smart move to broaden their audience and diversify their revenue streams. But it's not the primary way Youtube makes money and likely never will be.

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chii10mo ago

depending on what they watch and how much time watching, youtube might actually lose money on a premium user. I imagine it's not easy to watch enough be worth $12 dollars worth of ads in one month tho...

4gotunameagain10mo ago

I don't think so.

Using a $20 CPM [1] (Cost Per Mille, the money advertisers pay per 1000 views), $12 turns out to be 12/20 * 1000 / 30 = 20 ads per day. I would argue that the average youtube premium user watches less than that.

And I would argue that youtube really knows the numbers, and google would not lose money. Don't forget they've turned evil ;)

[1] source is the most recent Big Time video

sltkrOP10mo ago

The main problem with this analysis is that not all Youtube viewers are of equal value to advertisers. Premium subscribers are the people who have demonstrated that they are willing and able to spend money on luxuries. These are also the primary audience of advertisers (compared with, say, the elderly living off welfare, minors without a credit card, people living in poor countries).

Every premium subscription Youtube accepts reduces the value of its ad-supported audience, not just in an absolute sense (i.e. this user won't watch ads anymore), but in the sense that it lowers the CPM advertisers are willing to pay for the remaining “cheapskates”. The premium subscription price has to account for that, which is why the price should be significantly higher than the average ad revenue per user.

kashunstva10mo ago

> Google wants you to watch ads OR pay for a subscription

Actually I suspect the logical operator here is `AND`. In fact, this is largely what holds me back from paying for any Youtube subscription; frankly I don’t trust them to show me zero ads ever regardless of what fee I pay. So I will keep playing the cat-and-mouse game as long as it lasts.

david-gpu10mo ago

Do they serve you ads today when you have a paid subscription?

If they ever start doing that, you could stop paying. But not paying now for the hypothetical possibility that they may start serving you ads in the future sounds more like an excuse.

GuB-4210mo ago

YouTube doesn't, but many video creators do. Not something YouTube has much control on though, for them, that's just content and is served as such. You can use the SponsorBlock extensions to automatically skip these if you want.

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