YouTube to launch ad free subscription based model in India


MUMBAI: Google’s popular video hosting platform YouTube has been a boon to independent content makers as it enables them to exhibit their talent to a worldwide audience. Now, in order to enhance user experience, YouTube is all set to launch a subscription based ad free model in India. According to sources close to the development, YouTube is planning to launch the innovation around mid June for Indian consumers.

While viewers are offered a wide range of content on the platform, almost all content on YouTube starts with an advertisement wherein the option of skipping it is sometime available and sometimes not. Ads often pop up in the middle of the content too, which interrupts the flow of the viewers.

The new subscription based ad free platform will ignite the long sustaining debate of the whether a video on demand (VOD) platform should follow the advertising or subscription based revenue model. Advertising revenue mode is directly proportional to rating and when it comes to YouTube, its views. It is often very difficult to satisfy both consumer and advertiser at the same time and hence the content and root idea behind it gets compromised.

Subscription based model also has its own drawback, poor online payment infrastructure, lower number of credit or debit card holders are a few of them.

Times Network CEO and MD MK Anand is of the opinion that though subscription model has a lot of positives, India is not yet ready for it. “Consumer behaviour is the biggest challenge besides payment gateway and card penetration. A huge part of digital savvy young population refrains from using card transactions for various reasons and hence at this moment advertisement revenue model is the only option. Going forward, if the number of card holders increase and the consumers behaviour towards e- transactions becomes friendlier then we may see a new revenue model emerging.”

YouTube’s new offering will enable a consumer to either choose the ad free platform or stick to the available one. From content creators’ perspective, Ping Network co-founder Rajeshree Naik asserts, “The new innovation from YouTube will cater to the growing need of sophistication of a consumer. We can take example from the newly launched HD channels, the same content is available on the SD platform too but consumers are paying to get quality content. The innovation will help us satisfy more people with the content we are offering.”

When asked if Ping Network will create fresh content exclusively for the paid platform, Naik adds, “Not at the moment. For now the platform will only provide better and uninterrupted viewing experience to the consumers. But going forward if the platform makes a sustainable impact creating exclusive content can be an option.”

According to the 2014 KPMG report, 12 per cent of the digital ad spend mix is acquired by videos and the spend on digital video has increased by five per cent compared to 2013. When questioned whether the ad free platform from YouTube will impact advertising, Maxus South Asia head of digital Unny Radhakrishnan says, “There will not be any significant impact on advertising immediately. As per the news reports, YouTube has said that advertising will still be their core revenue. The share of consumers who will go for paid subscription will be very small initially. In the long run, this would perhaps lead to more investments and therefore increase in the quality of content and in turn paid subscription. An India roll-out of this is not expected in the near future.”

It remains to be seen if the new initiative from YouTube breaks the mould and creates a new sustainable revenue model, which will satisfy both producers and consumers.

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