Alphabet-owned video website YouTube (GOOGL) has launched a new subscription tier called Premium Lite that offers ad-free videos for $7.99 per month. However, music videos will still have ads. This new tier is designed for viewers who do not watch a lot of music content and are looking for a more affordable option. It is also part of YouTube’s plan to better compete with streaming services like Netflix (NFLX) and Disney (DIS).
Interestingly, the new tier fills a gap in YouTube’s existing offerings. Indeed, the company’s $13.99 Premium plan offers ad-free music and videos, while a separate $10.99 plan provides ad-free music videos but includes ads on other content. Therefore, Premium Lite is a middle ground for viewers who don’t need ad-free music. According to YouTube executives, the plan is designed to appeal to a “much larger set of people” who may not have considered paying for YouTube otherwise.
YouTube has already tested Premium Lite in several countries, such as Australia, Germany, and Thailand, and the results were promising, with a new wave of first-time subscribers signing up for the service. Some of these subscribers even upgraded to the full Premium plan later on. It is worth noting that YouTube currently has over 125 million paying subscribers, which are becoming an increasingly important part of the company’s revenue.
Is Google Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on GOOGL stock based on 26 Buys and 11 Holds assigned in the past three months. After a 25% rally in the past 12 months, the average GOOGL price target of $215.56 per share implies 27.1% upside potential from current levels.
