How YouTube’s ‘Lite’ Subscription Offering Fuels Its Netflix Rivalry

YouTube was already winning the race to replace TV, but what if it actually wants to become TV?

It’s hard to interpret the company’s recent moves any other way, from a major redesign of its TV app to more closely resemble subscription streamers to the integration of NFL coverage into its offering to the latest news: a “Premium Lite” subscription tier that allows users to watch YouTube ad free at nearly half the cost of its longstanding Premium service (minus Premium’s other benefits).

But wait, how exactly does Premium Lite make YouTube more like TV, a format that’s always been riddled with advertising?

Well, consider recent reports that the video giant is attempting to reduce the frequency of ad breaks for viewers, in response to data showing users prefer lengthier ads over more frequent interruptions — “especially when they’re watching multiple videos for long periods of time,” as a September Tubefilter post noted.

SEE ALSO: Social Video vs. Paid Streaming — A Race to Replace TV

“Based on this preference, we launched fewer, longer ad breaks, to create a more seamless viewing experience on the big screen,” a YouTube spokesperson told Tubefilter.

In other words, as users increasingly treat YouTube more like TV — keeping it on for extended watches, viewing multiple “episodes” in a single sitting and, most notably, watching it on “the big screen” — the platform is striving to meet them where they live.

And of course, many consumers now watch TV via SVOD, where watching without ads is always an option. An ad-free experience especially helps YouTube emulate Netflix, the platform now practically synonymous with TV for many viewers. Yes, Netflix now offers an ad tier, but all indications are that the vast majority of its users still watch (and ergo pay to watch) ad free.

The same cannot — and possibly never will — be said of YouTube, but the platform appears to be steadily raking in more and more subscription dollars.

On an October 2024 earnings call, Alphabet CEO Sundar Pichai revealed that, for the first time, YouTube’s combined ad and subscription revenue had surpassed $50 billion over the past four quarters. Alphabet’s corporate filings reveal YouTube generated $34.9 billion of ad revenue during that time, which means it took in at least another $15 billion from subscriptions.

Premium Lite is all but certain to expand that total. There will likely be some cannibalization from Premium subscribers downgrading to the cheaper tier — Premium Lite is $7.99 per month versus Premium’s $13.99 — but the new plan will also attract plenty of new subscribers who weren’t willing to shell out before or returning subscribers who canceled as the cost of Premium rose.

And the move fits with the broader pattern indicating YouTube’s ambitions to beat Netflix at its own game. The platform has long been striving to transform its reputation as a home for non-professional, user-generated content, and positioning itself as a subscription video product is very much of a piece with that effort.

Perhaps we could suggest a new slogan, inspired by another Netflix rival? “It’s not YouTube — it’s TV.”