YouTube is taking a surprising step with an experiment to block ad blockers.
A Reddit user first became aware of the experiment when they encountered a pop-up message saying, “Ad blockers are not allowed on YouTube” while trying to watch monetized videos.
This development follows a series of actions by the Google-owned video platform against ad blockers.
In 2016Google removed purpose-built ad-blocking apps from the Play Store and modified its Chrome browser in a way that could end ad-blocking extensions.
Last year, Google close YouTube Vanced, a third-party app that blocks embedded ads without a YouTube Premium subscription.
Is declining advertising revenue the reason?
The timing of YouTube’s experiment is intriguing, given the platform’s recent decline in ad revenue.
Parent company Alphabet Inc. reported a 2.6% year-over-year drop in YouTube ad revenue in the first quarter of 2023.
The decline marks the third consecutive quarter of decline in ad revenue for YouTube, which brought in $6.69 billion in the first quarter of 2023, compared to $6.87 billion in the same period a year earlier.
Despite that drop, YouTube beat analysts’ expectations of $6.6 billion. However, the steady decline concerns content creators whose income depends on advertising revenue.
YouTube’s advertising woes coincide with tough competition from rivals like TikTok. In response, YouTube is increasing its focus on shorts, which saw an 80% increase in daily uploads last year.
Encouraging Premium Subscriptions
YouTube’s ad-blocking experiment could be part of a broader strategy to persuade users to go Premium.
The Reddit user reports that the pop-up message offered them an option to sign up for the ad-free service.
Faced with declining advertising revenue and economic uncertainty, it makes sense for YouTube to look for other sources of revenue.
While it may seem like an increase in YouTube Premium subscriptions could reduce ad revenue for creators, it’s important to note that this is not the case. YouTube’s system ensures that creators of monetized channels earn money when their videos are viewed by Premium members.
YouTube Premium can provide a new source of income for creators. As Premium subscribers increase, creators could see an increase in their earnings, despite the absence of traditional ad views.
In this way, both YouTube and its creator community could benefit from the growth of Premium subscriptions, making it a win-win scenario for all parties involved.
What’s next for YouTube?
As YouTube faces declining ad revenue and increasing competition, the outcome of this ad-blocking experiment will be fascinating to watch.
As Neal Mohan takes over as the new CEO following the departure of Susan Wojcicki in February, the future of YouTube’s business strategy and its relationship with its vast user base is up in the air.
Featured Image: every week/Shutterstock
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