In response to You Tube’s announcement to launch a premium service called You Tube Red, Rose Donohoe of The New Daily and I chatted about the why, where and will we of this new service:

YouTube will soon ask users to hand over their credit card details to pay for a new premium service.

Starting in the USA next week and rolling out worldwide soon after, the website – which has been free since 2005 – will charge subscribers $US9.99 ($A13.85) a month for YouTube Red.

The premium service will offer ad-free streaming and the ability to play videos offline, as well as keep videos running in the background while you use other apps.

But a spokesperson for Google – which bought YouTube in 2006 – said the “same ad-supported, free version … won’t be going anywhere”.

“Paid offerings are simply a way to offer interested users additional choice in how they can view their favourite videos on YouTube,” the spokesperson said.

News of the premium service coincided with the announcement of YouTube Music, a music streaming app available soon.

In the meantime, YouTube Red subscribers will also get access to Google Play music, leaving other music streamers Spotify and Apple Music behind by offering both video and music streaming for the price of one.

Currently, Spotify is the market leader for paid music subscription, with 20 million paying users.

But business futurist Morris Miselowski said if anyone could knock Spotify off its perch, it was YouTube.

“They’ve got the content. They’ve got the brand awareness. They’ve got the reach,” he said.

“The only thing is they have a legacy of being free, whereas Spotify entered the market and said ‘You’re going to have to pay’.”
Capitalising on YouTube stars

The success of YouTube Red may depend on whether diehard users are willing to pay to see their favourite stars.

According to YouTube’s announcement, those willing to fork out for the premium service will gain access to a stable of YouTube Red-exclusive productions from “some of YouTube’s biggest creators”.

YouTube Red “Originals” will include shows from stars such as PewDiePie, CollegeHumor and Wong Fu Productions.

“I don’t know whether enough people will care about the ads, it will be about the specialist content,” said Mr Miselowski.

“They look like they’re going to tee YouTube stars up with real Hollywood directors to make something worth the extra $10.

“They want to make the new Orange Is the New Black.”

PewDiePie, a 25-year old Swede, posts videos of himself reacting to playing video games, and has been YouTube’s biggest star since 2013 with a following of 40 million.

But PewDiePie’s audience are mostly gamers, and he is by no means a household name.

Will people pay?

Despite being the world’s largest video-streaming site, a question still remains over whether users will be willing to spend the cash.

“People can be broken down if the content’s right,” Mr Miselowski said.

“Lots of people are willing to pay for Spotify.”

YouTube’s chief business officer Robert Kyncl told The Verge 99.9 per cent of the site’s content won’t be paywalled after the new service is introduced from next week.

“The success will depend on whether that extra one per cent is good enough to make people want to pay,” said Mr Miselowski.