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Freetube is the best way to watch YouTube
(www.popsci.com)
This is a most excellent place for technology news and articles.
For some reason I doubt that's a common practice with people hellbent on not seeing ads and not paying for the service.
Color me surprised if I'm wrong about that.
I use youtube music everyday as well as downloading videos on my phone to play without wifi. So maybe I do use some premium features, which may make me biased.
I don't subscribe to anyone, but have donated to the authors I like, just as I did to the FOSS projects I use. One blogger even has a site where you can tie your donation to a specific video of his.
And for Youtube Music - RiMusic does just what you described but does not require a Google account or a recurring payment.