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How Many YouTube Users Will Be Premium Subscribers in 2023?

Mike McLafferty
Mike McLafferty

YouTube advertising has long been an affordable and effective way to connect with audiences. And considering YouTube is the world’s second-largest search engine and the second-largest social media network, it’s not likely that this is going to change any time soon.

But this raises a fair question. YouTube does offer an ads-free service called YouTube Premium that has continued to grow since it was founded in 2014. Here’s what that growth really looks like and how it’s anticipated to affect audiences in 2023 and beyond.

What is YouTube Premium?

YouTube has a solid history of providing user-created content to a steadily growing audience of viewers. More than 2.5 billion people access YouTube at least once a month. However, only a small percentage of these viewers have made the leap to paying for the service. YouTube Red was the company’s first attempt at providing premium services. The service garnered less than 10 million subscribers before YouTube scrapped the approach and relaunched it as YouTube Premium.

YouTube Premium pairs ad-free videos with YouTube Music, providing extra value to subscribers. This approach has proven slightly more successful, with 30 million YouTube Premium subscribers worldwide as of 2020.

The Growth of YouTube Premium

In 2021, YouTube Premium reported having 50 million Premium and Music subscribers globally. However, they didn’t distinguish the Premium service from the Music service, making it difficult to determine how well either option is performing independently. This number also includes users in the one-month free trial period. Though this number may seem high, it’s a drop in the bucket compared to Spotify’s 165 million subscribers.

US subscribers made up 67% of YouTube Premium’s worldwide audience in 2020, yet less than 9% of all YouTube users in the US subscribe to Premium. This amounts to about 22.5 million in 2022. YouTube Premium’s US audience is expected to grow to 26.7 million or 8.9% in 2023.

Considering there are more than 300 million Americans and 197 million daily active users of the platform in the United States, this means that roughly 91% of the US population and 88% of the platform’s daily active users are not currently subscribed to YouTube Premium.

AVOD vs SVOD Viewing

Advertising-Based Video on Demand (AVOD), which is the paradigm that YouTube began with, is becoming an increasingly popular choice for viewers. Subscription-Based Video on Demand (SVOD) services, like YouTube Premium, may have trouble keeping up with their free or lower-priced counterparts.

Industry experts believe advertisers can actually expect the number of SVOD subscribers to either plateau or go down in the coming years. The marketplace has become ridiculously saturated with premium subscription services, which create an ever-increasing expense for users. In response, viewers are gravitating to AVOD platforms instead. SVOD platform giants like Netflix are actually changing their offerings to include AVOD services and AVOD viewers are likely to rise to more than 50% of all US digital viewers.

YouTube Premium’s Rising Prices

While YouTube Premium has just a moderately sized audience, it’s already increasing its prices. The price of the Family Plan is increasing 28% to a whopping $23 a month from its previous price point of $18 monthly. The price of the individual plan and student plan will remain unchanged for the time being. However, it’s likely that a rise in prices will precipitate the service’s userbase to further plateau in years to come.

What this Means for Youtube Advertisers

So what does this growth in YouTube Premium subscribers actually mean for Youtube advertisers? At the end of the day, it doesn’t mean much. Although YouTube Premium has seen a decent amount of growth in recent years, and Statista anticipates a US audience of 27.9 million subscribers by 2024, that growth is relatively incremental.

Barring a sea change in the marketplace, it seems unlikely that a record number of users will opt-in to paying for what has traditionally been a free platform. For advertisers, YouTube remains a worthwhile investment as the lion’s share of its users do still view ads during the content as a way to minimize their entertainment expenses.

Want to learn more about how to get started in the world of YouTube advertising? From the early steps of developing your message to the final execution of launching your campaign, Mediagistic can help. Learn more about how this tactic can benefit your brand today.

Mike McLafferty is an Account Development Manager at Mediagistic who specializes in planning marketing campaigns for the home services industry. A Hawaiian native, McLafferty also is a successful actor, having been featured in multiple roles for both film and television. Connect with him on Linkedin.

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