You are a PM at YouTube. YouTube raised the price of YouTube Premium by 10%. After the change, 10% of its users unsubscribed. What would you do?

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You are a PM at YouTube. YouTube raised the price of YouTube Premium by 10%. After the change, 10% of its users unsubscribed. What would you do?

Asked at Meta (Facebook) over a year ago

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a7cH7y3 · Answer 1 · 2022-08-03T23:23:18+0000

Below is a rough outline of how I approached this question.

Clarifying Questions
1. Do we have any information on why we chose to raise prices?
  1. No.
2. Are there any other platform changes we experienced like a redesign or addition to new features?
  1. No.
3. Perfect, thank you. Can I take a moment to prepare some thoughts?
Establish Structure
1. I'll start off with an overview of YouTube premium, what it does? what is its purpose, then go into a deep dive looking at competitive platform analysis and internal analytics, then finish it off with next steps. How does that sound?
2. Overview of Youtube Premium, what it does? purpose?
3. Deep dive
  1. Competitive Platform Analysis, did another platform release something during this same period?
  2. Internal Analytics, from the 10% of users who unsubscribed, how many were on free trial? Did they leave the platform altogether?
  3. Next Steps: How can we get this revenue back?
    1. Obtain more monetization partners
    2. Add new features to Youtube Premium
    3. Offer a lower cost premium service
  4. How does strcurture sound
Overview of Youtube Premium: Youtube Premium is offered as a paid service to users with the benefits like watching content ad-free and being able to multitask by keeping YouTube open and being able to interact with other phone features. Google owns YouTube and as a whole offers an easy way for people to create content and share it around the world.
Deep Dive
1. Competitive Platform analysis: Looking into Vimeo, and Streaming Services like Netflix and Hulu. Did they release a new feature recently in the same time period? If so, how does it relate to our platform? This can help us get a better idea of why our users left.
2. Internal Analytics:
  1. Why did we choose to raise the price?
  2. Do we have any survey data from YouTube Premium users? Perhaps there is a feature or bug we need to address?
  3. How many of the users who left were on the YouTube Premium free trial VS long-time customers?
  4. From the people that left YouTube Premium, did they leave Youtube completely, or did they just downgrade to the ad version?
3. Next Steps:
  1. Obtain more monetization partners to help make up for the lost revenue stream
  2. Youtube Premium, adding more features to the platform to entice users to adapt to the new price
  3. Revisit the subscription structure, perhaps adding a low-cost subscription tier like others in the space have been doing to attract other users.

Prateek Sachdeva · Answer 2 · 2023-08-23T19:17:20+0000

Clarifying questions:

Was the price of YouTube premium raised for mobile devices or desktop? (Both)
was it raised for android or ios devices? (both)
was the subscriber drop for app or web? (app)
For which geographic region was this price changed? (global)
the drop in user subscriber base is for free users or premium users? (both / mixed)
Any specific region where the users unsubscribed from? (No)
any specific demographic that unsubscribed? (No)
when was the price changed?
when did you start noticing a drop in user subscriptions? was it over a period of time or was it sudden? (the price was changed last week, there had been a gradual decrease since last week)
Has there been a similar drop before when youtube premium prices were increased? No
How many users out of the ones who dropped were on a free trial plan? (approx 40%)
How many users out of the ones who dropped were about to renew there subscriptions? (approx 5%)

Internal questions:

Have we recently changed the UI of our app? UI which impacts how the users are viewing the content/ discovering content. (we have recently changed the UI for people who have their history settings on vs off. People who don’t have it turned on won’t discover any videos)
Is this for both paid vs free users? Yes
is there any issue in our analytics tracking software? (No)
have the users recently logged in any complaint with respect to the app or the website? No
Have we recently launched a new app build? Has there been any issues logged in by our QA or dev team? No
Have we launched a new plan for youtube premium recently? (For eg. a slightly cheaper plan for mobile users) No
How many devices on an average are using one YouTube premium account? (5). Has this increased recently? (Last month it was 3)
Have we changed our pricing design by any chance? (system 1 design vs system 2 design) No
Which genre of users have unsubscribed the most?
Has any other metric changed? (Yes, average watch time has gone down by 5%)
For which category? (Mostly for music videos)

External questions:

Has there been a change in the pricing of any of our competitors? (Yes Spotify has launched a cheaper mobile plan for users. It’s discounted by 10%
Has YouTube been in the news lately for any negative reason? No
Has any of the YouTube content creators been in a negative light recently? No
Has there been any change in the laws and regulation affecting YouTube in any of the countries? No

Conclusion:

Primary reasons of the paid subscriber drop:

Most people were on trial plans
More number of people are now sharing one paid account
Spotify has launched a more lucrative plan for mobile users.

We need to implement checks on the number of people sharing an account, checks on password sharing.

Timely push to users on free plans

Launch a more competitive mobile plan to counter spotify.