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From Clicks to Conversions – Brand Wagon News
After a surge in subscribers to the platform — it surpassed the magical 100 million mark earlier this year — YouTube is doubling down on its Premium service. Last week, it introduced a slew of new features designed to keep viewers hooked on ad-free content, mirroring the offerings of its rivals in the over-the-top (OTT) and music streaming wars.
But marketers know how hard it is to convert free trial users to paid ones. So if the average person perceives you as a “free” offer and then you’re trying to get them to buy your product, it’s important to make sure your free-to-paid conversion strategy is on point. YouTube is facing the same dilemma.
The platform, which sells its YouTube Music and Premium subscription together for plans starting at `79 per month for students, `129 per month for individuals, `189 per month for families or `1,299 per year, has launched experimental features like “Jump Ahead”, which lets users skip to relevant parts of the video using AI and viewing data. It has also introduced a picture-in-picture feature for YouTube Shorts in certain parts of the world and enabled “Smart Downloads” that would allow a viewer to watch them even when offline. It has introduced conversational AI and is redesigning its watch page.
The platform currently has more than 637 million users IndiaThat’s expected to grow to 859 million by 2029, according to Statista. But will the paid version spark similar enthusiasm from price-conscious Indians? Karan Taurani, senior vice president and research analyst at Elara Capital, estimates that the paid version of the platform has around 1.5 million to 2 million subscribers in India, a number that’s hard to scale. “Globally, the aggregator model started because of the high penetration of connected TV, as people are not as interested in watching ads on their phones. I don’t foresee YouTube Premium growing further unless we see CTV grow as well,” he says.
And that future isn’t too far away. Connected TVs are expected to reach 35 million in India by 2023, according to EY’s M&E 2024 industry report. The report also said the segment is likely to gain traction after 2026, when wired broadband reaches 60 million to 70 million households and 5G connections scale significantly.
So far, so good, but price sensitivity remains a major hurdle — a problem faced by streamers like Netflix. So is there much room for growth?
Nisha Sampath, managing partner at Bright Angles Consulting, says the brand hasn’t fully embraced the opportunity to convert free users into paid ones. “Spotify and Apple Music think and act like paid services, but YouTube still feels like a free service that is now trying to extract a fee for ad-free viewing. There is a difference in the mindset of the consumer audience.”
So what can the platform do to attract users? Sampath says that right now, beyond downloads and ad-free viewing, it’s unclear what the added value is for a subscriber. Even a free user can access YouTube’s vast catalog, which is the streaming service’s real USP. A stronger set of subscriber benefits could be helpful. For example, bundling access to exclusive content from creators (which currently costs money separately) or offering HD video and lossless audio on YouTube Music.
Additionally, the company could increase its focus on localized content, exclusive regional offerings and affordable pricing plans, says Ambika Sharma, founder and CEO of Pulp Strategy. “Bundling with other popular services or telecom plans could also increase appeal,” she adds. Promoting the educational and entertainment value of YouTube Originals and Music could help capture a larger audience, she says.
Providing highly personalized content recommendations based on individual viewing habits and preferences by leveraging the power of AI is another option. Yasin Hamidani, Director of Media Care Brand Solutions, points out that the platform will do well to reduce buffering through AI-driven network management and also curate and promote region-specific content, catering to diverse linguistic and cultural preferences.