YouTube sent partners an updated Terms of Service today that will allow YouTube to begin charging fans a monthly fee. Sources are stating that a monthly YouTube subscription for an ad-free experience is expected to cost about $10/month. That seems a little high to me given the price of Netflix, the use of adblockers, and the $0 cost of watching YouTube with ads.
From the top of the Content Creator Studio on YouTube:
YouTube’s monetization terms are changing to allow you to share in new revenue opportunities. These changes go into effect Jun 15, 2015.
That would seem to indicate June 15th as the target date when a paid YouTube might go into place, or at least no sooner. YouTube will use 55% of a subscriber’s monthly payment to divide across the videos that subscribers view. From the updated terms:
- Advertising Revenues. YouTube will pay you 55% of net revenues recognized by YouTube from ads displayed or streamed by YouTube or an authorized third party on your Content watch pages or in or on the YouTube video player in conjunction with the streaming of your Content. YouTube is not obligated to display any advertisements alongside your videos and may determine the type and format of ads available on the YouTube Service. For clarity, YouTube reserves the right to retain all other revenues derived from the YouTube service, including any revenues relating to ads on search result pages.
- Subscription Revenues. YouTube will pay you 55% of the total net revenues recognized by YouTube from subscription fees that are attributable to the monthly views or watchtime of your Content as a percentage of the monthly views or watchtime of all or a subset of participating content in the relevant subscription offering (as determined by YouTube). If your Content is included in and viewed by a user in multiple subscription offerings, YouTube will pay you based on the subscription offering with the highest amount of net revenues recognized by YouTube, as calculated by YouTube.
YouTube partners were emailed the following letter today to announce the upcoming change:
Dear YouTube Partner,
Your fans want choices. Not only do they want to watch what they want, whenever they want, anywhere, and on any device they choose, they want YouTube features built specifically with their needs in mind. Over the past several months, we’ve taken bold new steps to bring these experiences to life. Since inviting hundreds of thousands of fans into our YouTube Music Key Beta, we’ve seen tremendous engagement. And we’ve seen an equally enthusiastic response for our new YouTube Kids app, designed to give families a simpler and safer video-viewing experience— it’s already crossed 2 million installations in less than one month.
We’re excited to build on this momentum by taking another big step in favor of choice: offering fans an ads-free version of YouTube for a monthly fee. By creating a new paid offering, we’ll generate a new source of revenue that will supplement your fast growing advertising revenue.
So what’s next?
Launching a new paid offering will require us to update your terms through your Creator Studio Dashboard—a process that should feel familiar to anyone who went through a similar process three years ago when we began distributing and monetizing your content on mobile devices. Today, mobile represents over half of all watchtime and mobile revenue is up 200% in the last year. Just as with mobile, we’re confident this latest contract update will excite your fans and generate a previously untapped, additional source of revenue for you. Please look out for our notification, review it and let us know your thoughts.
It’s an exciting year for YouTube, as we push ourselves into uncharted territories. But we continue to be guided by a desire to deliver the choices fans want and the revenue you need. By working closely with you, we know it’ll be a successful journey.
The YouTube Team