>Not sure whether we live in different times, but isn't the same with YouTube? The cost to watch is $0, and you can even watch it ad-free for $0 with a free ad-blocker, yet 50 million people still choose to pay $12/mo for YouTube Premium.
Isn't that more about information asymmetry than value proposition?
Blocking YouTube ads with the appropriate add-ons for free isn't necessarily that well known, except among the tech savvy.
While some tech savvy folks may choose to pay rather than use such add-ons is one thing, but the "great unwashed masses" don't have information about such add-ons, perhaps encouraging them to purchase something they wouldn't purchase if there was more perfect information availability in the market.
I'm not claiming that's the case, but it seems a reasonable supposition.
Potentially yes, but hard to believe that a $7bn business exists only because of lack of information. I certainly don't lack the information and few other people from my circle that also pay for it so it is hard for me to scale from there.
Ad blockers don't work for YouTube on a TV or the native YouTube app (unless you are one of the few people with a DNS ad blocker). I wonder how many of YouTube Premium subscribers primarily use the website. I'm a YouTube Premium subscribers solely because I typically watch YouTube on my TV.
> Ad blockers don't work for YouTube on a TV or the native YouTube app (unless you are one of the few people with a DNS ad blocker). I wonder how many of YouTube Premium subscribers primarily use the website. I'm a YouTube Premium subscribers solely because I typically watch YouTube on my TV.
An excellent point. I mostly watch YouTube on a computer with ad blockers, and I also have a DNS-based ad blocker (Pi-hole). And the combination does block many ads, but other add-ons are required to block the video window ads as well.
I don't use YouTube enough on non-general purpose computer devices enough to care about that. As such, I didn't consider that as a reason to pay for Premium.
I'm not aware of any scholarship looking at correlation between level of tech knowledge (specifically, ad blockers) and subscription behavior to avoid ads.
That said, apparently ~42% of global users[0] block some ads.
Given that there are ~4.6Bn users[1], of which ~1.9Bn sometimes use ad blockers, some 2.7Bn users don't use ad blockers at all.
50 million (although that includes YouTube Music subscribers as well as YouTube Premium) subscribers is a little more than 1% of total users and ~2% of users who don't use ad blockers.
I'd also point out that nations with higher per-capita incomes tend to use ad blockers less, which implies (again, I'm not claiming this to be true) that they may be less knowledgeable about ad blocking technologies.
It's not clear what the global distribution of YouTube Premium subscribers looks like, but it's reasonable to think that those with higher (and presumably more disposable) incomes would be more likely to pay for such a subscription.
I don't have any data to back up my hypothesis, as I can't find any published research into the tech savvy of those who pay for YouTube Premium vs. those who don't.
Even more, just because the absolute numbers (50,000,00 subscribers which includes 30,000,000 YouTube Music, and 2+ or 7+ billion in revenue, depending on if you count the 30,000,000 YouTube Music subscribers) are large, given the total population, they are a tiny group.
How many people use add-ons to block youtube ads? Who knows? Possibly Google/Alphabet, but they certainly aren't going to talk about that.
I want to be crystal clear that I'm not saying you're wrong, but the idea that there's a lack of information driving subscriptions to get ad-free youtube is certainly a reasonable one.
Perhaps that's a good topic for a master's thesis in psychology? Since I'm not a marketer or a grad student in Psychology, that wouldn't be something I'd do. Hopefully someone will.
It is a valid analysis and I think that my primary analogy still holds - a good browser should be able to find 10M paying users, when something like YouTube Premium is able to find 50M, just because browser is a much more valuable tool - even though free alternatives exist (because free YouTube also exists).
>It is a valid analysis and I think that my primary analogy still holds - a good browser should be able to find 10M paying users, when something like YouTube Premium is able to find 50M, just because browser is a much more valuable tool - even though free alternatives exist (because free YouTube also exists).
A reasonable point. And I don't necessarily disagree.
Although "Video of stuff I want to look at" may be more compelling than "some icon I click to view the intarwebz," when they see essentially the same thing unless they take specific steps to block ads/tracking.
And that goes double for Android phone users.
My hypothesis was orthogonal to your thesis, but I agree that the data I outlined certainly supports yours.
Isn't that more about information asymmetry than value proposition?
Blocking YouTube ads with the appropriate add-ons for free isn't necessarily that well known, except among the tech savvy.
While some tech savvy folks may choose to pay rather than use such add-ons is one thing, but the "great unwashed masses" don't have information about such add-ons, perhaps encouraging them to purchase something they wouldn't purchase if there was more perfect information availability in the market.
I'm not claiming that's the case, but it seems a reasonable supposition.