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YouTube will earn as much as $6 billion this year from the increasing number of ads that accompany videos on the world’s busiest website. It could earn even more charging consumers a subscription fee to get rid of them.
As online video advertising loads increase, online viewers are growing increasingly intolerant watching 30 second ads just to view a two-minute video. YouTube has at least allowed most of the its ads to be manually skipped by the user after a five second waiting period, but as more and more videos are subjected to the “pre-roll” ad treatment, a growing number of YouTube fans seem prepared to pay a nominal fee never to be bothered with ads again.
YouTube CEO Susan Wojcicki believes there is room for both free, ad-supported videos and a paid subscription, ad-free model and it is contemplating letting YouTube viewers choose between the two.
“We’re early in that process, but if you look at media over time, most of them have both ads and subscription services,” Wojcicki said at the Code/Mobile conference. “YouTube right now is ad-supported, which is great because it has enabled us to scale to a billion users, but there’s going to be a point where people don’t want to see the ads.”
YouTube rival Hulu may have already reached that point. It charges $7.99 a month for Hulu+, its enhanced service, but its online programming still carries a very heavy ad load, now approaching what viewers would see watching their favorite shows over broadcast TV. That advertising has cost Hulu+ a significant number of subscribers unwilling to pay a premium price for online videos littered with commercials.
Hulu showed users an average of 82.3 ads a month, compared with YouTube and other Google-owned sites, which showed an average of 32.3 ads per viewer, according to comScore data from December 2013.
A number of advertising agencies are welcoming a reduction in online advertising. With saturation advertising, viewers have a tendency to tune out the ads or go back to pirating video content. A small number of ads tend to hold viewers’ attention better and most won’t bother trying to skip or ignore a single 15 or 30 second ad.
“After Facebook went public, they had in-stream video and it suffocated the users and they pulled back,” Steve Minichini, chief digital officer at ad agency Assembly, told The Post. “If what we’re hearing is correct — that Hulu is pulling back — I would welcome that.”
I would actually be ok with paying $5 a month to get rid of the ads. As long as the only thing that goes are the ads with the subscription. The rest better remain the same as its always been.
I don’t watch enough on YouTube to really notice, but the option to pay for an ad-free experience would be nice. I have noticed Hulu+ is lowering the ad rate, but the variety is nowhere to be found. Sailor Moon time after time after time gets tedious. Would I pay $5 to make it go away? Maybe.
And Phillip, I’ve never seen commercials on Hulu+ exceed two minutes – a far cry from the pummeling we get on sat and OTA.
Hmmm…reminds me of cable tv when it first started. Marketed as paid for service because it was ad free, until they became a big enough monopoly to charge for service and have ads.
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