 Hello there, welcome to YouTube. I'm guessing you've been here before. Over the last decade, YouTube has grown from a handful of oddball clips into the world's biggest and most influential video platform. And today, it's about to introduce its biggest change yet, a monthly subscription service that will fundamentally change the way users and creators can interact with YouTube. Advertising has always paid the bills on YouTube, but with YouTube Red, that no longer has to be the case. You subscribe for $9.99 a month and you'll never see an ad again. In addition, you can take videos offline and watch them when you don't have connectivity, and you can watch YouTube videos in the background. So if you've got a TED Talk or a music video, you can let the audio from that play while you're answering a text or out on a bike ride. You've announced something that's pretty interesting and steps a bit away from advertising. Tell me about what it is you guys are rolling out today. We've created a way for people to amplify their YouTube experience by removing all ads. At the same time, we also have announced that we'll produce new, big, original content with the people who have become most successful on YouTube and have rabid audiences of fans. And instead of having them produce great new content for other platforms, they can do it right here where their home is, where their audience is. This is really good. I'm really impressed. YouTube understands that the last thing its creators want is to force their fans to pay to watch videos. So with YouTube Red, all the choice lies with the audience. It's a lot like Spotify or Pandora. If you want to watch for free, you'll sit through some ads. If you decide to pay, everything is ad-free and there's some power features. We really believe that viewers want the choice to have an uninterrupted YouTube experience. And so we said, how can we create an offering that can remove the interruptions of ads, that can give additional features like background and offline capabilities and even access to new exclusive content? At the same time, YouTube is eager to coax more content behind the paywall. They want this to be a service not just for the super fans, but for someone who might otherwise sign up for Netflix or Hulu. And so, at an event this morning in Los Angeles, they unrolled a new slate of originals that you can only see if you subscribe. The stuff that sits behind the paywall will feature stars who are native to the platform, paired with talent from Hollywood and television, all with a generous heaping of Google money thrown on top. We're not focused on what other people do. We're focused on our own audience. Our approach is focused on our own talent pool and work with them and have them be our temples. So what we're doing is matching them together with other really experienced producers. PewDiePie, for example, YouTube's biggest star, is being paired with the producer of The Walking Dead and getting a giant budget to create a brand new horror show, which will run in addition to his normal YouTube channel. What up, bros? This is PewDiePie. To us, this is a great example of a collaboration between just the phenomenal global talent from YouTube and somebody who has created one of the best and most popular TV shows on television today and sort of meshing these two talents together. Another one is Lilly Singh shooting a documentary of her tour around the world, which is amazing. YouTube is facing increasing competition from the likes of Facebook, Snapchat and Vine. It's hoping that with YouTube Red, it can create a big pool of new revenue, revenue it can use to reward its creators and keep them on YouTube. A lot of content creators who are really successful in achieving large audiences through all kinds of platforms are turning to other funding mechanisms, Kickstarter and Patreon, etc., to access fan love and translate it into support. And we're effectively doing that through YouTube Red. YouTube Music is going to have what I would expect, which is, you know, music videos, interviews, concert footage. And so you were saying that, you know, you feel like almost all the big music labels are on here. We have all the major labels and publishers and aggregators of music and many of our entertainment partners that probably have music content are coming on board. So we're very confident that as they continue seeing the experience, they're going to get more excited to have their company in the app and it's just going to grow. As far as competition, if you're in the space that's, you know, $250 billion annually, you will not be the only person playing in it. The other capable companies are trying to take a share of that big pie. Facebook obviously is a very capable one. Twitter is another one. And there'll be more and more. We constantly make sure that we know everything about the competition just so we are smarter. What we're really focused on is what does our audience want? How can we enhance our business? The world that all of our advertising partners are used to remains alive and well and continues to grow at an astonishing rate of 60% year on year actually. We're focusing on growing the ad business at the rate that we're growing it now and now layer on top of it a subscription business that hopefully diversifies the revenue stream for our content creators and accelerates the flywheel of content creation. Now ads on YouTube obviously aren't going to go away for most people. In fact, YouTube thinks that the vast majority of viewing will still be free ad supported. But it knows that at the same time cable and network television are in decline. People like me, cord cutters, are increasingly used to putting together an a la carte selection of subscription services for music and television and film. And the generation younger than me, they're watching most video on their phones and are more likely to recognize a star from YouTube or Snapchat than a big personality from prime time television. The internet is doing the cable, what cable did to broadcast. That it's just broadening a set of choices which means total engagement is going up but the ratings on the fewer bigger things is going down. So I think you have to really learn how to function in a fragmented world. And I think that YouTube is incredibly well positioned for that world. I mean that is all we focus on. Since the dawn of the world wide web, people have dreamed of a new media universe. One with a nearly unlimited supply of creators, each serving an audience perfect for them. With YouTube Red we're about to find out how close we are to finally achieving that dream.
 Hello there, welcome to YouTube. I'm guessing you've been here before. Over the last decade,
 YouTube has grown from a handful of oddball clips into the world's biggest and most influential
 video platform. And today, it's about to introduce its biggest change yet, a monthly subscription
 service that will fundamentally change the way users and creators can interact with YouTube.
 Advertising has always paid the bills on YouTube, but with YouTube Red, that no longer has to
 be the case. You subscribe for $9.99 a month and you'll never see an ad again. In addition,
 you can take videos offline and watch them when you don't have connectivity, and you
 can watch YouTube videos in the background. So if you've got a TED Talk or a music video,
 you can let the audio from that play while you're answering a text or out on a bike ride.
 You've announced something that's pretty interesting and steps a bit away from advertising. Tell
 me about what it is you guys are rolling out today.
 We've created a way for people to amplify their YouTube experience by removing all ads.
 At the same time, we also have announced that we'll produce new, big, original content with
 the people who have become most successful on YouTube and have rabid audiences of fans.
 And instead of having them produce great new content for other platforms, they can do it
 right here where their home is, where their audience is.
 This is really good. I'm really impressed.
 YouTube understands that the last thing its creators want is to force their fans to pay
 to watch videos. So with YouTube Red, all the choice lies with the audience. It's a
 lot like Spotify or Pandora. If you want to watch for free, you'll sit through some ads.
 If you decide to pay, everything is ad-free and there's some power features.
 We really believe that viewers want the choice to have an uninterrupted YouTube experience.
 And so we said, how can we create an offering that can remove the interruptions of ads,
 that can give additional features like background and offline capabilities and even access to
 new exclusive content?
 At the same time, YouTube is eager to coax more content behind the paywall. They want
 this to be a service not just for the super fans, but for someone who might otherwise
 sign up for Netflix or Hulu. And so, at an event this morning in Los Angeles, they unrolled
 a new slate of originals that you can only see if you subscribe. The stuff that sits
 behind the paywall will feature stars who are native to the platform, paired with talent
 from Hollywood and television, all with a generous heaping of Google money thrown on
 top.
 We're not focused on what other people do. We're focused on our own audience. Our approach
 is focused on our own talent pool and work with them and have them be our temples. So
 what we're doing is matching them together with other really experienced producers.
 PewDiePie, for example, YouTube's biggest star, is being paired with the producer of
 The Walking Dead and getting a giant budget to create a brand new horror show, which will
 run in addition to his normal YouTube channel.
 What up, bros? This is PewDiePie.
 To us, this is a great example of a collaboration between just the phenomenal global talent
 from YouTube and somebody who has created one of the best and most popular TV shows
 on television today and sort of meshing these two talents together. Another one is Lilly
 Singh shooting a documentary of her tour around the world, which is amazing.
 YouTube is facing increasing competition from the likes of Facebook, Snapchat and Vine.
 It's hoping that with YouTube Red, it can create a big pool of new revenue, revenue
 it can use to reward its creators and keep them on YouTube.
 A lot of content creators who are really successful in achieving large audiences through all kinds
 of platforms are turning to other funding mechanisms, Kickstarter and Patreon, etc.,
 to access fan love and translate it into support. And we're effectively doing that through
 YouTube Red.
 YouTube Music is going to have what I would expect, which is, you know, music videos,
 interviews, concert footage. And so you were saying that, you know, you feel like almost
 all the big music labels are on here.
 We have all the major labels and publishers and aggregators of music and many of our entertainment
 partners that probably have music content are coming on board. So we're very confident
 that as they continue seeing the experience, they're going to get more excited to have
 their company in the app and it's just going to grow.
 As far as competition, if you're in the space that's, you know, $250 billion annually, you
 will not be the only person playing in it. The other capable companies are trying to
 take a share of that big pie. Facebook obviously is a very capable one. Twitter is another
 one. And there'll be more and more. We constantly make sure that we know everything about the
 competition just so we are smarter. What we're really focused on is what does our audience
 want? How can we enhance our business?
 The world that all of our advertising partners are used to remains alive and well and continues
 to grow at an astonishing rate of 60% year on year actually. We're focusing on growing
 the ad business at the rate that we're growing it now and now layer on top of it a subscription
 business that hopefully diversifies the revenue stream for our content creators and accelerates
 the flywheel of content creation.
 Now ads on YouTube obviously aren't going to go away for most people. In fact, YouTube
 thinks that the vast majority of viewing will still be free ad supported. But it knows that
 at the same time cable and network television are in decline. People like me, cord cutters,
 are increasingly used to putting together an a la carte selection of subscription services
 for music and television and film. And the generation younger than me, they're watching
 most video on their phones and are more likely to recognize a star from YouTube or Snapchat
 than a big personality from prime time television.
 The internet is doing the cable, what cable did to broadcast. That it's just broadening
 a set of choices which means total engagement is going up but the ratings on the fewer bigger
 things is going down. So I think you have to really learn how to function in a fragmented
 world. And I think that YouTube is incredibly well positioned for that world. I mean that
 is all we focus on.
 Since the dawn of the world wide web, people have dreamed of a new media universe. One
 with a nearly unlimited supply of creators, each serving an audience perfect for them.
 With YouTube Red we're about to find out how close we are to finally achieving that dream.