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YouTube is still having trouble getting people to pay for YouTube

YouTube is still having trouble getting people to pay for YouTubeWhen YouTube Red launched a year ago, the plan was for the service to grow into a competitor against the likes of Netflix and Hulu. Now, less than a year later, subscriber totals show that YouTube still has a long way to go before the public will accept paying a monthly fee for YouTube.

According to multiple sources with knowledge of the situation, YouTube Red had 1.5 million paying subscribers as of late summer, with another 1 million users signed up on a trial basis (and not paying the monthly fee). Those numbers underscore just how difficult it is to convince millions of people to pay for something they’ve had free access to for over a decade. They also reflect the interest level in YouTube Music, which launched last November and requires a Red subscription to take full advantage of.

There are some statistics in YouTube’s favor. YouTube Red has only rolled out in four countries so far — US, Mexico, Australia, and New Zealand — which means the service isn’t available to all of YouTube’s over 1 billion monthly users. The service is outpacing the growth of video competitors like CBS All Access and Sling TV. And YouTube says Red subscribers are the heaviest users of YouTube. Creators featured in YouTube Red Originals see a significant boost in subscribers and watch times on their main channels. The company also noted that Red subscribers watch 75 percent more YouTube on their TVs than average users.

The numbers against YouTube: it’s the biggest video streaming service in the world and the biggest music streaming service in the world. As the leader in either of those categories, 1.5 million subscribers in the first year of a paid service isn’t great, and it’s especially not great when you’re the leader in both categories. Tidal grew faster than YouTube Red did in the first year after its relaunch, picking up 2.1 million subscribers. (To be fair, Tidal rolled out to more countries than YouTube Red did in its first year — but! — Tidal was / is a public relations disaster that most of the internet loves to hate.)

YouTube said it’s happy with the growth of Red, and is fully invested in the service. “We’re pleased with momentum behind YouTube Red and we’re seeing healthy growth of members each month,” a YouTube spokesperson said. “While we don't release or comment on speculative numbers, we’re seeing strong engagement of the service in the four countries we’ve launched, leading us to invest in more originals series and movies for 2017 and increased marketing of YouTube Music.”

By the end of 2016, YouTube will have released 20 Red Original series and movies, four of which have already been renewed. Going forward, it plans to add shows from Lionsgate and a pair of series produced by Dwayne “The Rock” Johnson and Edge of Tomorrow director Doug Liman.

Google isn’t exactly hurting for cash, but it has to find a way for YouTube to make more of it. And if that’s going to happen anytime soon, YouTube will have to speed up its expansion of Red to new markets, continually improve the service, and add more high-quality content if it wants to become a serious competitor to the Hulus and Spotifys of the world.
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