Decide How to Respond When a 10% YouTube Premium Price Rise Drives 10% Churn

You are a product manager for YouTube Premium, the paid YouTube subscription that removes ads and adds extra features. YouTube recently raised the Premium price by 10%. In the period after the increase, 10% of Premium subscribers cancelled. What would you do? Walk through how you would assess the situation and what you would recommend. ```hint Weigh the trade before reacting Cancellations are only half of the picture. Compare what the remaining subscribers bring in at the new price with what the whole base would have brought in at the old one, and ask what cancellations would have looked like with no price change at all. ``` ### Clarifying Questions - Is the 10% measured against everyone who was subscribed when the increase was announced, over what window, and how does it compare with cancellations in a normal month? - Did the increase apply to every plan (individual, family, student) and every country, and did existing subscribers pay the new price immediately or at their next renewal? - Why was the price raised, and what result was the increase expected to deliver? - Are the 10% completed cancellations, or do they include people who switched off auto-renewal and are still paying until their period ends? ### What a Strong Answer Covers - Revenue and lifetime-value arithmetic that shows whether the increase gained or lost money, measured against the churn that would have happened anyway. - Validation and sizing of the cancellations: voluntary versus involuntary, a one-time wave versus a lasting change, and exposure still to come. - Segmentation of who left and where they went, and separation of price-driven cancellations from other causes. - A clear recommendation among holding, rolling back or reshaping the offer, prioritized and tied to metrics and guardrails. ### Follow-up Questions - Most of the cancellations came from family-plan subscribers in a few price-sensitive countries. How does your recommendation change? - Leadership is considering another increase next year. How would you estimate price sensitivity before committing to it? - How would you design a win-back offer for people who cancelled without teaching subscribers to cancel just to get a discount?