YouTube is about to take a big step forward. Google (GOOGL) says its web-based video provider is set to launch an ad-free subscription service in a few months. The service will start at $7.99 per month and allow users to watch videos offline.

Yahoo! Finance Senior Columnist Michael Santoli thinks YouTube’s move to a premium-tier model makes sense.

“If you don’t want to see the ads, then pay up. This seems to be a model a lot of new media companies are following.”

He notes that the model offers a new subcategory of how companies deliver streaming media and allows users more choice.

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While Netflix (NFLX) and other streaming video providers offer similar ad-free subscription packages, Santoli adds that YouTube’s service not a direct challenge to Netflix.

“Netflix, with its originals and name brand programming, is doing a slightly different thing. But it’s the same idea: how much are you willing to pay to have ad free entertainment? In that general way I do think it is competition.”

Even so, Santoli doesn’t think the products are substitutes for one another.

“Very few people say ‘I am a Netflix person’ or ‘I am a Youtube person’ or ‘I am an Amazon Prime person.’ You pick and choose off the menu and you can layer these things on top of each other.”

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