YouTube’s global head of music Lyor Cohen told Bloomberg that they plan to “frustrate and seduce” users with more ads, so they buy into their subscription service.
YouTube has announced plans to increase the number of ads that users see between music videos, which is part of a strategy to sell their forthcoming music subscription service. Cohen, the former label exec, said in an interview at SXSW festival, “You’re not going to be happy after you are jamming ‘Stairway to Heaven’ and you get an ad right after that.”
YouTube says, “Our top priority at YouTube is to deliver a great user experience, and that includes ensuring users do not encounter excessive ad loads. For a specific subset of users who use YouTube like a paid music service today—and would benefit most from additional features—we may show more ads or promotional prompts to upsell to our paid service.”
YouTube seems to be employing a bit of damage control after the statistics reported by Complex last year said that musicians make between $1,000-$2,000 per million views on YouTube. That works out to about $0.002, or one-fifth of a cent, per click, which is around half of the per-stream payout from Spotify, and less than a third of the payout from Apple Music.
The company has also come under fire for hosting music videos that violate copyright laws and videos that they say violate their terms of service (i.e. people like Jake Paul and InfoWars’ Alex Jones).
YouTube announced plans to launch a streaming service late last year, and it may be an uphill battle for them to be able to compete with streaming giants such as Spotify, Apple Music and Tidal. Cohen said YouTube is planning a significant marketing campaign to back this new paid service. YouTube generated an estimated $10 billion in revenue last year, mostly from advertising, and if they manage to sell a lot of these subscriptions, their total revenue could potentially skyrocket.