Global media platform YouTube has expanded its user subscription service with a new Premium Lite pilot, now available to U.S.-based users for $7.99 per month.
The company also plans to introduce this tier to users in Thailand, Germany, and Australia.
Jack Greenberg, Director of Product Management at YouTube Premium, said in a statement: “Since launching YouTube Music and Premium, we’ve focused on giving subscribers a variety of ways to enjoy their favourite content, and Premium Lite is the latest step in that evolution.”
What’s the difference?
At $7.99 per month, Premium Lite allows users to watch most videos ad-free but excludes music content and music videos. It also lacks additional features like offline downloads, background play, and ad-free music videos. In contrast, YouTube Premium, priced at $13.99 per month, includes all of these features.
“We’ve been testing Premium Lite to ensure we strike the right balance of features and benefits for viewers who want to watch most videos ad-free—whether it’s gaming, comedy, cooking, or learning,” Greenberg added.
YouTube Premium was originally launched as "Music Key" in November 2014, focusing mainly on ad-free music streaming. It was later rebranded as YouTube Red in October 2015, expanding to include ad-free video streaming and original content. In June 2018, YouTube Red was rebranded again as YouTube Premium, offering ad-free videos, background play, offline downloads, and YouTube Music.
Despite initial challenges in gaining traction, the new subscription service attracted 2 million users by February 2016; over time, its premium offerings evolved and eventually showed substantial growth. In February 2024, YouTube Premium reached a major milestone, hitting 100 million subscribers globally across its paid music and video tiers, and is now estimated to be sitting at 125 million subscribers globally.
A tiered pricing strategy
This addition to YouTube’s product strategy follows a well-established model used across many industries: tiered pricing. This approach allows companies to offer different packages with varying features at differing price points.
“The number of packages can vary, but most subscription companies offer two or three pricing tiers,” says Yuri Berchenko, Head of Product Partnerships at YouTube, in a previous guest post for Mind the Product.
“This is a great model for software or streaming companies that want to offer their customers flexibility. By catering to multiple buyer personas at different price points, businesses can maximize revenue while providing an easy upsell opportunity for long-term users as they outgrow each tier.”
However, he warns that offering too many choices can lead to indecision and lower sales. “It’s tempting to introduce more tiers to appeal to different customer budgets, but this can result in ‘analysis paralysis’ and lost conversions.”
What’s next for YouTube?
With over 2.5 billion monthly active users, YouTube continues to dominate the video streaming landscape. In February 2020, The Verge reported that YouTube had generated more than $34 billion in advertising revenue over three years.
Time will tell if Premium Lite will help boost subscriber numbers and drive additional revenue, but it’s clear that YouTube is not slowing down any time soon.
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