It seems YouTube is taking a page from Spotify‘s business model, which has been successfully enticing its free users into paying premium tiers for years. During a recent SXSW panel, YouTube’s global head of music, Lyor Cohen, revealed that the streaming website has plans to bombard its heavy music listeners with more ads in the hopes of agitating them into paying for YouTube Go subscriptions. “There’s a lot more people in our funnel that we can frustrate and seduce to become subscribers,” says Cohen.
While the move will be frustrating for the millions of users who use the platform as a free streaming alternative, it’s a win for YouTube in terms of business. Either users will be converted into paid subscribers or YouTube will make loads of money from increased advertisement revenue. The move is thought to help make the company more competitive with Spotify, who currently leads all streaming platforms in overall subscribers. Artists and labels have long criticized YouTube for hosting millions of videos that violate music copyrights while earning YouTube profits.
YouTube’s new service is still expected to launch sometime this spring, with combined features of the existing YouTube Red and Google Play Music services into a single streamlined package.