YouTube Plans More Ads Between Videos to 'Frustrate' Some Viewers Into Paying

Sean Mathis/Getty Images for SXSW
Lyor Cohen speaks onstage at the Music Keynote during SXSW at Austin Convention Center on March 14, 2018 in Austin, Texas. 

YouTube’s much-discussed upcoming paid subscription service, rumored to be on the way sooner rather than later, will be closely scrutinized following the relative lack of success of its two previous attempts at paid tiers, YouTube Red and Google Play. And in a new interview with Bloomberg conducted during last week’s SXSW Conference and Festivals, YouTube’s global head of music Lyor Cohen laid out one of its potential strategies to push its 1.5 billion monthly active users to open their wallets: more ads.

“There [are] a lot more people in our funnel that we can frustrate and seduce to become subscribers,” Cohen said in the interview. “Once we do that, trust me, all that noise will be gone and articles people write about that noise will be gone.”

In a keynote address at SXSW last Wednesday (March 14), Cohen spoke generally about YouTube’s goals in the paid subscription world, without speaking specifically about the company’s plans for the new service. "There are plenty of leaned-in listeners that are willing to pay -- we are going to convert them to paid subscribers," he said during his career-spanning speech. "We know we're late to the party. We're making an enormous investment. We're going to collaborate and work closely with our label partners to understand their priorities to help them promote and break their artists."

Since Cohen officially joined YouTube in December 2016, he’s led the Google-owned platform’s efforts to work more closely with the music industry, helping orchestrate licensing deals with all three major labels and generally working to bridge what he has referred to as the "disconnect" between the video streaming service and the music biz at large, which has been frustrated by what it sees as insufficient payouts. A large part of that strategy will hinge on the success of the forthcoming paid tier, as the record industry focuses on subscription streaming and the revenue it has generated over the past several years that has helped bring the business back to a measure of prosperity.

YouTube has also been getting a team in place to help that launch, bringing in popular Rap Caviar curator and global head of hip-hop Tuma Basa from Spotify in an as-yet-undisclosed role earlier this month, while bolstering its original content and various artist-promotional series.

Not all of the service’s users will see an increased number of ads, however. "Our top priority at YouTube is to deliver a great user experience and that includes ensuring users do not encounter excessive ad loads," a YouTube spokesperson said. "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," the company said.