AUSTIN, TX: YouTube plans to serve more ads to heavy users of music videos in a bid to “frustrate and seduce” more people into signing up to its new music subscription service, according to a leading executive at the Google-owned company.
Speaking to Bloomberg at the South by Southwest music festival in Texas, Lyor Cohen, YouTube’s global head of music and a veteran music industry executive, said the company wanted to “smoke out” users who can afford to pay a subscription.
“There’s a lot more people in our funnel that we can frustrate and seduce to become subscribers. Once we do that, trust me, all that noise will be gone and articles people write about that noise will be gone,” he said in reference to criticism from record labels about alleged copyright infringement and YouTube not paying enough.
According to a report last year from the Record Industry Association of America, streaming music platforms generated the majority (51%) of the US music industry's revenues in 2016.
And with Swedish rival Spotify and other music platforms increasingly moving to a subscription model, Bloomberg has previously reported on YouTube’s plans to introduce its own paid-for music service.
Its interview with Cohen confirmed that YouTube’s plans are well-developed, even imminent, and the new service is said to include exclusive videos, playlists and other offerings that will appeal to die-hard music fans.
What’s more, Cohen made clear that YouTube plans to support the new music service with a significant marketing campaign.
As for those frequent music listeners and viewers, who have become accustomed to YouTube’s free offering, he said: “They will appreciate in time the advertising. Everyone is drunk on the growth of subscription.”
However, YouTube later softened Cohen’s remarks. Without denying plans to serve more ads, a company spokesperson told The Verge: “Our top priority at YouTube is to deliver a great user experience and that includes ensuring users do not encounter excessive ad loads. We do not seek to specifically increase ad loads across YouTube.
“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.”
Sourced from Bloomberg, The Verge; additional content by WARC staff