LTV for Youtube premium?
Youtube premium is a service which people can use to watch videos on Youtube without ads and also access to original content plus Youtube music premium service. This is costed for $11.99 per month for an individual plan and slightly different for student/family plan.
For the purpose of this execrise, i would take $11.99 per month as the monthly plan cost
I would identify the type of users that would be most interested in purchasing this plan, how many people will convert from free trial to paid (from 1.5% that sign up), how many months an average user would stay to compute LTV.
Youtube users: MAU: 2bn
Users of Youtube interested in purchasing premium would be :
Identify user personas:
1. high content consumers: consume youtube content heavily- night, watching on tv, travel
2. medium content consumers: watch it or listen to it less frequently like if they want to search for something, if they follow someone posted a new content
3. Rare watchers: goto youtube when someone shares a video with them or if they want to find something
To compute this i need to understand what painpoint this service is potentially solving for high content consumers:
1. download music and listen on the fly
2. download videos and see without internet even
3. youtube original: i am not sure how much of interesting content that is
4. no ad to bug you when watching something serious
5. play in background
6. play music on google home
With the current service of youtube(non premium)- what is the painpoint or benefit which is compuslive enough to make users purchase this service for $11.99 per month?
- download videos and see without internet even
- no ad to bug you when watching something serious
- play youtube music on google home
1.5% users that do sign up on Youtube premium- 1.5% of 2 bn = 30 mn - one month free trial
Of these 30 mn - people that will not cancel after 1 month of a free trial would be mostly people that are heavy content consumers- (based on engagement numbers- these people would have an engagement of more than 3 sessions per day and avg session time of 15 min)- assuming its approx 10% of 30 mn= 10 mn
10 mn - worldwide highly engaged users that would sign up for subscription and pay
specific regions more interested in buying per the buying capacity:
US and Europe: assuming 40% users would be in US and Europe- 4 mn
Of these 4 mn - % of users that will invest $11.99 a month would be mainly with a capacity to sustain and value that much cost- Of following user groups(student, retired professionals, homemakers, professionals, etc.) i believe- professionals, as well as retired professionals, will make most of it as they would want the youtube content on fly as well as through google home plus ads free.
Mainly professionals and retired prof would make a decision to buy which I assume is approx 30% of the active user base in US and Europe(40mn)= 1.2 mn
Average life span: 3 years
Average LTV: 3*1.2* 11.99 * 12 * 10^6 = $500 mn approx
