YouTube recently sent an email with new terms of service to its partners as it relates to a forthcoming subscription service. Following in the footsteps of YouTube Music Key, the site will soon offer an ad-free video experience for subscribers, and it will be splitting the revenue with creators.
This service, along with Music Key, and YouTube’s VoD service are efforts to identify segments of the audience and provide specific services for those each segment. The email reads in part:
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.
The email also says that hundreds of thousands have signed up for Music Key, more than two million have signed up for the YouTube Kids app, and notes that mobile represents half of all watchtime on YouTube. The YouTube audience has become more segmented, either naturally as communities coalesce, or as the audience is divided by corporate interests.
The new ToS for partners does not prevent users from uploading videos to YouTube, and it isn’t necessary for creators to offer their content on the subscription service. However, if content creators want to monetize their content at all, they must accept the terms and allow YouTube to both post advertising on it, and offer it to subscribers.
The revenue split for the new subscription service is the same as the advertising revenue split for partners: 55 percent to the partner, 45 percent to YouTube. However, the subscription revenue will not be tallied in the same was as the advertising revenue. Revenue will be calculated based on 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.
It seems that users will be subscribing to multiple channels, or channel packages, and then creators will be dividing revenue based on the amount of traffic they drive, possibly with an additional share coming from pooled subscriber payments. YouTube already has a paid channel option along with other paid content, but this model is new and still unclear.
Some have speculated that the price for users will be $10 per month, but YouTube has made no statement to that effect and the company hasn’t provided any release date for the new subscription model. It will be interesting to see if users are willing to pay for ads to be removed, or if they’ll be motivated to subscribe to support their favorite creators.