Google’s YouTube gets serious about subscriptions with plans to roll out two subscription services by year end, says The Verge. One will be YouTube’s Music Key, a monthly subscription service now in beta testing. The other unnamed service will offer premium content behind a paywall. These changes will give YouTube a mix of revenue streams: advertising revenue, music subscriptions, and premium content.According to Invest Correctly, this is a necessary move for YouTube. Though the site has more than 1 billion users, the site is unprofitable and needs to find a way to monetize its popular content. YouTube must also successfully compete with new players in the video market, including Facebook and Comcast.Critics aren’t convinced that Music Key will be successful, because it has been slow to launch and YouTube’s relations with music labels are strained, says The Verge. In spite of those obstacles, YouTube remains the largest streaming music platform, with 45 of the 50 most-viewed YouTube videos being music videos and the most popular place for teens to get music.Let’s look at the new subscription services. Music Key. Though it is not available en masse yet, Music Key offers ad-free music videos and the ability to save videos offline. During the beta test, users get six months free. After that, they’ll pay $8 a month (plus tax) to get access to official videos, album tracks, concert clips, etc. Subscribers will also get access to Google Play Music with a library of more than 30 million songs, playlists, and official music videos. [Note: after beta testing is over, new subscribers will pay $10 a month.]Premium content. This YouTube service has not yet been named, as far as we know. It will offer ad-free videos behind a paywall and the ability to store videos offline, says Techspot. Premium creators will have the ability to put some of their videos behind the paywall. Techspot says the service will be about $10 a month. Though YouTube has not announced what the premium content will be, Invest Correctly speculates that producers will offer their best content, improving the overall quality of YouTube content.YouTube will continue to offer ad-supported content for free.Insider Take:Though an official announcement by Google or YouTube has not been made, the timing is interesting, coming just weeks after Google’s reorganization into Alphabet. The reorganized company’s emphasis seems to be on profitability and turning more of YouTube’s 1 billion users into paying customers. Despite criticism, you can’t blame the company for capitalizing on its assets. All subscription companies should leverage their strengths.From a revenue perspective, it is smart for YouTube to diversify its income stream, and something subscription companies of all sizes can learn from. Instead of relying solely on advertising revenue, YouTube will have two more, consistent revenue streams. Though it will take a while to win over customers who have long enjoyed YouTube for free, it has a captive audience…for now.We see two major obstacles: conversion and competition. YouTube has the users to build an adequate audience of subscribers, but it has to prove that its content is worth paying for, especially to younger audiences. YouTube needs to provide exclusive content to attract and retain subscribers. Competition wise, companies like Facebook and Comcast are revamping their business models and offerings to compete with digital video. YouTube can’t sit idly by while the competition steps up its game.