YouTube Premium's muffled pitch: Why a "sound strategy" isn't converting in India
Despite aggressive ad enforcement and user frustration with poor targeting and frequency, Indians remain reluctant to pay ₹129 a month to make the annoyance go away.
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Everyone Storyboard18 spoke to who uses YouTube Premium swears by it. No ads, uninterrupted playlists, background play, downloads — the experience is smooth, addictive, and, as many described it, “worth every rupee.” And yet, the numbers tell a different story: less than 5% of India’s YouTube audience is on Premium, according to industry estimates.
That’s the paradox. YouTube Premium isn’t failing because people don’t like it — it’s failing because most never try it. Despite aggressive ad enforcement and user frustration with poor targeting and frequency, Indians remain reluctant to pay ₹129 a month to make the annoyance go away.
Why? It’s not just about affordability. “In India, paying to not see something still feels counterintuitive to most digital users,” says Sindhu Biswal, CEO and founder of BuzzLab. “We’re a country that’s grown up on jugaad, skip buttons, and watching full cricket matches with banner ads dancing on top.” For most, he explains, YouTube’s Premium pitch essentially paying for an absence is a tough sell, especially when platforms like Spotify or OTTs offer visible benefits like exclusive content or early access.
Still, for those who’ve made the switch, Premium is more than ad-free browsing — it’s a habit.
Aditya Worah, a podcast producer says, “Spotify has just songs and podcasts, but YouTube has that — and much, much more.” Whether it's listening while walking, cooking, or working, Premium’s background play and download options have become indispensable.
Akshay Mathur, Founder & CEO - Unpromptd, who is a Premium Family plan subscriber for nearly a year, highlights two major use cases: background play for multitasking and an ad-free YouTube Music experience, particularly during parties. “The only downside, in my opinion,” they say, “is that at this price point, there’s no access to premium content. It should include some better and exclusive content.”
Manish M Nagori calls the service ‘fully satisfying’, especially with a child at home. “It’s connected to my TV where my kid listens to nursery rhymes, so no ads is a great feature.” He praises YouTube’s compatibility across platforms — Android TV, iPhone, CarPlay — and the YT Music app’s “great randomized algorithm.” His only gripe is YouTube’s own UX issue: “Not being able to find Continue Watching videos.”
Rutwik subscribes primarily for music. “YouTube is the original content repository for artists — the hub for all music, remixes, special sets,” they say. “Other platforms lose access to songs due to licensing, but YouTube is a saviour during those times.” The ad-free benefit has grown on them too. “When I’m watching a recipe, revisiting old videos, or learning a skill, not having ads saves time. Though as a marketer, it feels a bit ironic — guilty as charged.” They’re happy with the service overall: “The pricing is fair, and features like PiP, queuing, and syncing across devices really enhance the experience.”
Rony Patra values both YouTube Premium and Spotify, but sees YouTube as unmatched in scale. “Spotify is great for surfacing unknown artists. But YouTube’s catalogue is deeper — especially for long-lost or rare songs. YT Music’s algorithm may not match Spotify, but it performs decently.”
A Sound Strategy With a Muffled Pitch
The user experience is not the problem — the messaging is. “YouTube Premium isn’t selling an experience,” Biswal points out. “It’s selling an absence. And until that changes, it’ll remain a nice-to-skip product in India.”
From a business model perspective, YouTube Premium makes strategic sense. According to Arjit Sachdeva, co-founder of VDO.AI, the platform is clearly in long-game mode. “YouTube reported $8.92 billion in ad revenue for Q3 2024, up 12% year-on-year. And they’ve invested in server-side ad injection — not something you do for short-term gain.”
He notes that Premium subscribers also generate more consistent revenue per minute for creators, since payouts are based on watch time, not volatile ad CPMs. “They’re betting their content moat — especially among heavy users — is deep enough to shift behavior.”
Still, Sachdeva flags a fundamental challenge. “When 52% of users don’t convert despite aggressive prompts, it’s a messaging issue, not a pricing one.” He contrasts YouTube’s approach with Netflix’s — the latter built desire through exclusivity. “YouTube is limiting existing features instead. It’s a strategic plan hampered by tactical friction.”
The risk? “The execution might undermine what’s otherwise a smart model,” he warns. “There’s a clear shift toward subscription revenue. But the way it’s being pushed could be slowing that evolution.”
Meanwhile, Kartik Mehta, Head of Asia at Channel Factory, highlights a parallel concern: ad fatigue. “Most Indian users accept ads as the cost of free content — but poor targeting and repetition wear them down.” His firm’s consumer research shows that 68% of users are open to ads — if they’re relevant. But fatigue levels in India are already 10% higher than other APAC markets.
“The irony is that Premium uptake is low, so most brand activity still targets the free tier,” he says. “But that makes relevance even more important. Bad targeting feels intrusive. Good targeting adds value.”
YouTube’s move to block ad blockers with global ad blocker usage near 43% — may boost revenue, Kartik notes. “They hit $10.4 billion in ad revenue in Q4 2024, a 13.8% YoY jump. With this crackdown, revenue could surge by another 30–37%.”
YouTube Premium doesn’t have a product problem — it has a communication problem. For users who’ve taken the leap, it’s sticky, satisfying, and surprisingly versatile. But for the rest of India, it remains invisible, misunderstood, or simply unnecessary. Unless YouTube can shift the narrative from “remove the annoyance” to “unlock a better experience,” the service will remain beloved by a few and bypassed by the many.
