YouTube's got a new service aimed at competing with the likes of Netflix, Hulu Plus, and other popular paid streaming services.
It's called "YouTube Red," and it's $10/month.
For that monthly fee, you get access to the same YouTube as everyone else — except there's on major bonus: no advertisements!
There are also some original shows coming next year, sure, but the real selling point here is dropping advertisements on YouTube.
Unfortunately for YouTube, some users have figured out their own way to get around ads: using tools called "ad blockers." These services scrub the internet of adverts, and thus scrub content creators using adverts of precious ad dollars.
YouTube's most popular star, Felix "PewDiePie" Kjellberg, has seen a loss of nearly half of his potential revenue through ad-blocking software.
"Out of curiosity, I asked via Twitter how many people actually use adblock," he wrote Thursday on his personal site. "I can also confirm with my own Google statistics that that 40% is a correct estimate. It’s a number that has grown a lot over the years, from roughly 15-20% when I started. And it’s not unlikely that it will keep growing."
Forty percent! That's a huge percentage of revenue to lose every month. For context, PewDiePie made around $7.4 million last year. Now double that: that's roughly how much money PewDiePie could have made last year — just shy of $15 million. But that's not what Pewdz is trying to convey here.
"Personally, I’m ok with if you use adblock on my videos. Ads are annoying, I get it, I’m not here to complain about that. But for smaller channels, this number can be devastating," Kjellberg said.
And he's totally right.
At the scale of someone like PewDiePie, that revenue loss is enormous. But he's already making so much money that it doesn't impact him that much! If you're a smaller YouTube channel, the loss of nearly half of revenue to ad blocking software can have a major impact.
And it's these ad blockers that PewDiePie says are at the heart of YouTube's new paid service, Red. Or, as Pewdz puts it: "YouTube Red exists because using Adblock has actual consequences."
What he's trying to say here is that the subscription costs of YouTube Red should offset that loss of revenue from ad blocking software. That's certainly the idea, anyway — whether YouTube Red will actually achieve that objective is another question altogether, a question that PewDiePie realizes is still unanswered.
"Will YouTube Red actually be beneficial for smaller channels? Is the $10 price actually justified?," he asked. "These are all important questions about YouTube Red. But right now, it’s more important that we understand what the actual problem here is."
Head over to his blog for the full piece, which is certainly worth a read.
On February 28, Axel Springer, Business Insider's parent company, joined 31 other media groups and filed a $2.3 billion suit against Google in Dutch court, alleging losses suffered due to the company's advertising practices.
