The streaming site recently sent out an email to content creators, putting them on notice that October 22nd is the last date for ratifying the latest changes to the YouTube Partner Programs term of service. The said changes—which were announced in April and took effect in June—spell out how the proceeds from subscriptions are to be shared with content creators. Under the proposed terms, the site will distribute 55 percent of its subscription revenue among its content partners on a pro-rata basis, based on each partner’s respective share of the site’s total premium views.
“As you heard in our previous emails, we want to ensure that fans who choose to pay for an ads-free experience can watch all the same videos that are available on the ads-supported experience. That’s why we’re asking you to update your agreement to reflect the updated terms for the ads-free service,” reads the email, warning recipients that the failure to do so will result in their videos becoming unavailable to the public.
According to unnamed industry sources tech site Re/Code talked to, the launch of the premium ad-free experience is expected to take place around the end of next month. The report also claims that the plan is to bundle ad-free access with the company’s MusicKey music-streaming service (currently in closed beta) for a flat $10-per-month fee. That would effectively be two services for the price of one as currently the latter alone is supposed to cost that much. Another site, AndroidPolice.com , concurs, saying one of its sources has even confirmed the name of this rumored two-in-one subscription: YouTube Red.
That being said, the Re/Code report warns, further delays can’t be ruled out. The rollout could be pushed back if the site fails to get a critical mass of its many amateur stars and other high-profile content partners to back the effort. This has reportedly been a bit of a problem area for the company. The Information (subscription required) reported back in June that a number of TV networks and influential content creators were refusing to play ball on the issue; the former owing to conflicting contracts with other platforms, and the latter over the possibility of subscriptions cannibalizing their ad revenue.
Why this matters: YouTube is trying to reduce its dependence on advertising, an inherently unpredictable revenue stream. Subscriptions could help the company achieve that and more. If successful, the move could go a long way in keeping competitors at bay. That’s because there’s only so much money any individual can spend each month on streaming, and therefore every dollar earned by YouTube in this manner would mean a dollar less for its competitors. Before all that, however, YouTube will have to ensure that the whole thing doesn’t come across as a glorified ad blocker.