IBM recently reported the results of a survey they conducted called “End of Advertising” to see how people felt about current methods of marketing and advertising. One interesting finding from the survey was this – 11% of the 2400 consumers surveyed said they would be willing to pay a nominal fee to view online video content free of ads. They also found that people value their Internet time just as much as, or if not more than their TV time, and want a quality experience. This helps explain why consumers would be willing to pay for a video service that’s currently offered for free.
Given that YouTube is king of video content on the web, would you pay a monthly fee to watch user-submitted videos ad-free? What about other sites on the web? We know that users will tolerate a certain amount of advertising and certain forms if they can get free content, but some would rather pay to have ads removed like the good old days where you paid for the services that you received. YouTube is a service, Gmail is a service, Yahoo Messenger is a service, yet they’re all free thanks to ads.
Between Read/Write Web and E-Consultancy, they crunched the numbers to see if offering a paid-subscription could potentially turn into a good business model in the future for sites like YouTube. If YouTube were to charge $2 per month for each user, and 10% of their 50 million users participated in the subscription service, YouTube would receive $137 million annually. Looking at it from the other side, if those same 10% of users generated money via the advertisements that YouTube currently uses, at most, they would make $38 million in annual revenue. The bottom line? YouTube could potentially increase their profits quite a bit if they started to offer a premium subscription plan.
So, would any of you be willing to pay an amount to some of your favorite sites and services if they’d remove the ads? What’s the most you’d be willing to pay per month?