Google Inc. is readying a YouTube subscription service, offering viewers the opportunity to eliminate ads by paying for its streaming video. The move will place the tech titan in direct competition with Netflix Inc. as well as Hulu LLC.
As the number of ads that appear before YouTube videos increases, Google is attempting to further cash in on YouTube’s popularity. Google will share revenue from the service with its YouTube video creators, according to Bloomberg.
Google’s YouTube subscription service could launch in a few months, the report said. The move comes after Google announced a music service called YouTube Music Key in November, which incorporates new features as well as ad-free music streaming from the site.
The new ad-free service could help Google recoup the hundreds of millions of dollars it has spent on YouTube talent and video production studios to increase the amount of original content to compete with exclusive shows on Netflix and Hulu.
The service is also expected to include offline YouTube playback, the report said, which could be a big selling-point for fans – as YouTube downloading software is often one of the most popular programs on sites like Download.com. The feature is also included with YouTube Music Key.
YouTube has more than 1 billion monthly viewers, but the company’s share of streaming traffic has fallen to services like Netflix during the second half of 2014 to 14 percent in North America, down from 19 percent a year earlier, according to Sandvine.
Google emailed the creators to explain that the new paid service would be a “new source of revenue that will supplement your… advertising service.” The move comes as Google attempts to generate revenue not based solely on ads, much the new movies it offers for sale or for rent.