YouTube Red Bundles Video, Music and Games

Mari Silbey
News Analysis
Mari Silbey, Senior Editor, Cable/Video
10/22/2015



Need another subscription service? YouTube has one for you.

Less than a month after news surfaced suggesting YouTube Inc. was about to introduce an ad-free video offering, the video-sharing site has announced YouTube Red. The new service, which is available on desktop and mobile devices, is priced at $9.99 per month and will be available from October 28. (See YouTube Advertises Ad-Free Service Report.)

In addition to ditching the advertisements, viewers who subscribe to YouTube Red also get access to offline viewing with video downloads, and the ability to play clips in the background on a mobile device while other apps are in use. YouTube is also promising new original programming starting in 2016. New programs will include a reality-adventure series centered on web star PewDiePie, and a new show from the producers of CollegeHumor, among ten total series and films.

YouTube is moving in the opposite direction from Comcast Corp. (Nasdaq: CMCSA, CMCSK) and Verizon Communications Inc. (NYSE: VZ), which have both launched their own ad-based web video services. However, the company joins Hulu LLC , which unveiled a commercial-free streaming video service -- albeit with premium programming -- in September for a monthly fee of $11.99. (See Verizon's Go90 Is Live Will Anyone Watch? and Hulu Goes Ad-Free.)


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The online video field is getting crowded, but YouTube does hold one ace up its sleeve. In launching YouTube Red, the company is bundling video content with its recently launched Gaming app and with a brand new YouTube Music app, which accesses Google (Nasdaq: GOOG)'s streaming music service. Since a number of streaming music services already sell for ten bucks a month, YouTube Red is just an added bonus for subscribers who choose Google Play Music. It's not a dissimilar strategy to Amazon including free streaming video with its Amazon Prime delivery service.

Original content could also be an audience draw; something that Verizon is counting on with Go90, and that Amazon.com Inc. (Nasdaq: AMZN) and Netflix Inc. (Nasdaq: NFLX) have made good use of with their own original scripted series. However, it's unclear yet if web-style video is something consumers are willing to pay for. YouTube is hedging its bets by packaging web video up with games and music in a single subscription.

— Mari Silbey, Senior Editor, Cable/Video, Light Reading

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