Google eyeing Netflix? YouTube confirms new subscription mode for ad-free streaming

What would you pay for ad-free YouTube?

It's always frustrating when you click on a YouTube video, ready to watch an Apple Watch unboxing or the latest Age of Ultron trailer, only to be accosted by a pre-roll ad for dietary supplements.

But those days are almost over, with YouTube informing its partners via an email that it is introducing a new subscription model for ad-free streaming.

At this stage, there's no indication of how much the subscription access will set viewer's back, but we do know that Google is planning on sharing the revenue with YouTubers.

"By creating a new paid offering, we'll generate a new source of revenue that will supplement your fast growing advertising revenue," the email to partners explains.

An update to the terms of service states that YouTube will share 55 per cent of the revenue from the subscription with content creators, although the actual amount that a partner receives will come from "a percentage of the monthly views or watchtime of all or a subset of participating content in the relevant subscription offering (as determined by YouTube)."

The throwing down of the gauntlet

This isn't YouTube's first subscription rodeo – the online video giant launched a premium content offering option for creators to lock lock content for a monthly subscription back in 2013, as well as the YouTube Music Key streaming service last year.

While the service hasn't really done much to threaten Spotify's supremacy, the move to a video subscription mode could be a massive challenge to industry behemoths Netflix. Especially if rumours about offline access (without a downloader) to videos pan out, and Google uses its relationships with content studios to bolster its user-generated content offering.

If Netflix can get some studios on board and blend professionally produced content with user-content, it could genuinely challenge Netflix as the biggest traffic driver on the internet again.

Having spent the past decade editing some of Australia's leading technology publications, Nick's passion for the latest gadgetry is matched only by his love of watching Australia beat England in the rugby.