YouTube original is free with ad support



YouTube has just concluded that its investments in original content will also be available for free with ad-supported as well as, of course, the ad-free paid edition.

I believe this makes a lot of business sense. The reason is simple, if individual YouTuber can make a living on getting only a small cut (it's a common assumption. I don't know the real cut percentage) of the advertising dollar Google earned from advertising, Google will earn even more if there are good contents inducing even more traffic.

From a decision making point of view, if Google launch its original programming with paid version only, Google will never know the potential of ad-supported channel result.

If the paid business does not turn out well and Google launch an ad-support on a second step, it tells the world that Google has made a wrong decision. Although there is nothing wrong with correcting a wrong decision, that could have been avoided if Google launch its premium program with both ad-supported and ad-free channels. The same logic goes if Google launch its original content ad-support only.

Launching the original programming contents in both ad-supported and ad-free channels give Google a chance to see the real market demand from both sides. By adjusting the price of advertising or watching the contents ad-free, Google can maximise the overall revenue.

Strategically speaking, YouTube started with a free contents and ad-supported model to disrupt the traditional paid contents platform and made it's success based on such model, there is every reason to continue such strategy to continue to expand its user base and viewership. Otherwise in longer run it stand to be disrupted by other players such as Amazon or Apple although the chance is low.

Anyway, as a guy who has cut the cord for more than 2 years, YouTube original contents being ad-supported is a great news for me!


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