> You could've easily made this argument about Hulu right before it did the exact same thing being described here.

The main point of paying for Hulu was to be able to watch the shows. Youtube doesn't have that. (They tried to have premium-only shows but it was never much and as far as I can tell they stopped a long time ago.) So while youtube could obviously increase the price another $3, I don't see how they could split off a viable premium-with-ads plan. The premium features outside of ad removal are close to worthless.

This was true of Cable as well.