Like any media product it will boil down to if people are happy with what they receive in exchange for what they pay - both in real dollars and in their time spent tolerating advertising.
The current ads on youtube are actually not that bad. Yes, you usually see ONE ad when you launch a video. ONE. And most of the time you can skip out of that ad before it is over. If you are watching a lot of 3 or 4 minute music videos that can seem a little annoying but if you are watching something that is 20-25 minutes long that is less than what you get from virtually any of the cable TV channels people are paying for.
The reason most episodes of 1/2 hour TV shows are only 22-25 minutes long when you buy them on DVD is the other 5-7 minutes (when aired) is commercials. So, for example, I have watched full episodes of cartoons / anime on Youtube and been subjected to only one commercial compared to several commercials if I watched it on TV.
The article mentions that for these paid subscriptions they are undecided about advertising and would probably leave it up to the entity selling the subscription / content. A few ads here and there might be a way to make the subscription cheaper. Most of the channels I see on cable don't interest me. Suppose hypothetically that I could subscribe to a channel(s) I really like (Discovery, ScyFy etc.) for a small amount of money with either no commercials or fewer commercials than I would see for the same channel on cable. That in turn made me happy with no cable or a lower package. The money I saved could make the subscription on youtube well worth it. They are starting out targeting lesser known content which is seeking greater exposure by my point remains the same that hypothetically you might find some paid content you felt was well worth it.
And for those who read my posts - yeah, I know I can't get either fast internet or cable at my house. I'm mentally comparing what I see when I take my laptop to the friend's house who has both.