It's in the article folks.

> "YouTube Red will split subscription revenue with the rights holders of content people consume through the service. YouTube managed to sign-on most of the independent creators, record labels, TV networks, and movie studios to the program. A YouTube exec told reporters at today’s launch event that YouTube is paying out “the vast, vast majority of revenue”."

"the vast, vast majority of revenue"

...for now. You don't boil a frog by turning the heat up all the way. Once you get people fully locked in and dependent on your platform by having both content AND viewership, you can have much greater ability to change agreements/pricing until there is a viable competitor.

I think it's pretty safe to say that YouTube already dominates both the content and viewership of online user-created video content.

Yup. The content creators will be an audience subject to exploit that cannot simply jump ship: a year or two from now, they'll make less and google will make more, because that's capitalism folks.

The cost of switching is very low for both viewers and content producers.

Producers: Upload content to new service -> Change comments on youtube videos and post an explanation of the change soon to occur -> hope your audience likes your brand enough to trust/use another website

Consumers: Search google or yahoo or duckduckgo for your favorite producer when you don't find them on youtube -> find them on other site -> watch

This adds a lot of value to Youtube for me and has solidified my move to Google's services - being able to easily stream a playlist of youtube videos ad free during parties and support creators without viewing ads is a benefit.

It does not go directly with Google's mission to catalog all the world's information - or at least in the way of making that information more accessible to everyone (since some content producers will be put off by this).

Probably the same way that "MCN's" do based on the amount of views and content created.

Prominent YouTubers also make quite a nice buck through in-video promotions and sponsorship as well as being paid for creating videos, and non-YT activities.

Yes, great question. I have two guesses: (1) simply "it doesn't". I'm sure most people will opt to watch ads rather than pay. That presumably much larger user base supports content creators (2) A fraction of the total subscription revenue is distributed to content creators weighed by views (a la Spotify)