With the recent launch of YouTube’s premium Red subscription service, I was curious as to how many have signed up in these first few weeks. When I couldn’t find any figures, I realised that it’s something I could quite easily estimate from my channel data.
Red is expected to generate more revenue for creators, at least per view, and I thought this difference could be used to estimate the proportion of viewers who are subscribed. For example, if it was expected to offer a 40 times greater income per view, and provided the same income as from AdSense, then approximately 1 in 40 people would be currently using the offering.
First I needed an accurate estimate for the earnings per view from a subscriber. This can be made by dividing the monthly cost by the average number of views in that same period. I took an average between my watch history in the last month (259 videos) and that of reddit user realnzall (570) which gives us 415 views. Spread $5.5o cents (55% of the $9.99 cost of Red) between these and each view is worth 1.325¢. That doesn’t sound like much at all, but the equivalent CPM (if we take it to mean earnings per 1000 views) it gives you is $13.25, which is considerably higher (6.625 times higher) than the average $2 CPM from AdSense advertising.
We can get an estimate for how many people are using the paid service by comparing earnings from it with those from AdSense. If we account for the fact that a Red subscriber means lost Adsense revenue, we get the following equation for total earnings. It gives us earnings for 500 views, which simplifies things because average AdSense earning rate for 500 views is simply $1 and so omitted. The 6.625 figure was calculated earlier, p is the percentage of people subscribed to Red, and e is increased earnings due to Red, as a percentage:
6.625 p + ( 1 – p ) = 1 + e
It is against Google’s terms of conditions to talk in specific terms about earnings rates, but I can say that in the last week, 1.66% of my US earnings were from Red. Plugging that number into the equation above tells us that roughly 0.1807% of Americans who use YouTube are currently using Red, which equates to over 220 thousand people.
I looked at my earnings from the United States because that’s the only place the service is available at the moment. Once it is available internationally it will lead to much greater earnings. This is not only because 80% of YouTube viewers are from outside of The States, but also because advertising rates are much lower in some other parts of the world, so could benefit more greatly from Red’s higher CPM.