YouTube tweaks Premium subscription with more free, ad-supported content

Dive Brief:

Google-owned YouTube announced that it is testing out a new programming distribution model for its subscription service YouTube Premium, including adding more content in front of the paywall, to draw in more subscribers, MediaPost reported. The move will include offering occasional free, ad-supported content.
YouTube Premium lets users stream most videos ad-free and provides exclusive content. The video platform had been releasing first episodes of original series for free, and then encouraging viewers to subscribe. An example of the change is the upcoming basketball docuseries "Best Shot," which is produced by NBA star LeBron James. The full series will be on Premium when it is released, but YouTube will also release new episodes weekly for free but with ads.
YouTube original shows will also become 20 minutes or longer to meet viewers' demands for more longer-form content, MediaPost said.

Dive Insight:

The paywall changes indicate that YouTube Premium has potentially struggled to retain momentum following a buzzy rollout earlier. YouTube introduced Premium in May as a rebranding of its existing YouTube Red service. "Cobra Kai," a spinoff off of the "Karate Kid," helped support the launch and featured episodes that run roughly 30 minutes.

The show outperformed popular series on rival platforms during the week of May 6-12, including "13 Reasons Why" and "Arrested Development" on Netflix and "The Handmaid’s Tale" on Hulu, according to Parrot Analytics data cited by Variety. "Cobra Kai" has been renewed for a second season. However, YouTube already tweaking its Premium model could signal that the Google-owned platform hasn't broadly found the right mix of programming to lure subscribers.

By slightly opening up the paywall for YouTube Premium and focusing on longer-form content, YouTube is hoping to gain stronger legs in the highly competitive — and potentially over-saturated — video-streaming market, which is dominated by over-the-top providers like Netflix, Amazon Prime Video and Hulu. Video streaming platforms have relied on hit shows and original programming to stand out, but consumers are also more frequently feeling overwhelmed by the number of options available.

Netflix, for example, announced in January that it would invest between $7.5 billion and $8 billion in original content this year and continue to invest over the next few years. As more consumers cut the cord, providing unique experiences will be essential in attracting and retaining viewers. The number of consumers without a paid TV service will increase 32.8% this year to 33 million, according to eMarketer.