Last week YouTube launched a new service called YouTube Red; which allows subscribers to watch YouTube without having to watch any ads. The service will also provide other features, such as the ability to download content to your device so that you can watch it offline, the ability to listen to audio from a video in the background on your mobile device, and gives you access to google play music library. All for $9.99 a month, or $12.99 if you sign up in the app. It will also feature exclusive content from top YouTube stars. It is going to be interesting to see how this content stands up to the original content on Netflix and Amazon. Both of these services have set the bar really high with original content. However, YouTube’s content might be specifically designed for consuming on mobile devices or what is also called the lean forward experience: which would mean it would be creating a new category of paid content.
Are people interested in paying for what they used to get for free? How do we as brands reach viewers in the light of this new media?
Brands will still be able to place ads on YouTube. They just won’t be seen by those who have a subscription. If this subscription model is successful, it will drive up the cost of YouTube ads because the amount of videos to advertise around will be smaller. Brands will have to pay more to get the attention of viewers who don’t want to see ads. This could lead to more brand deals with video creators so that brands can get in front of their audiences.
When will all of this happen? It will all depend on how many people subscribe. It will take a while for the concept to catch on. However, this will definitely force brands to create better content that is sharable. Keep in mind that some people already use ad blocking software so this new model will give people an option to cheating the system.
I have seen a lot of YouTube creators say that they don’t like all of the ads on YouTube. Saying that is like biting the hand that feeds you. In reality, video creators actually stand to make more money with this new service. Creators stand to make up to 25% more than they currently do from YouTube and it will possibly also increase the amount of brand deals with creators. YouTube is also going to pay creators more than they are going take making the split 55% to 45%. Since YouTube will be offering subscribers the first month free, I wonder if creators will see a difference in their checks at the end of November 2015?
With the new download feature. When files are downloaded to the device they remain available for 30 days. The download option could delay a channels view count; which could hurt videos in the short term until the device is back online and the view counts are synced with YouTube. It would be helpful if Google gave extra points for videos that were downloaded, even if the content wasn’t watched, but no such thing has been suggested by YouTube.
As mentioned previously, the service also allows you to play content in the background, so if you have a longer video that you want to watch but the real content is in the audio, you can just listen to the audio on a mobile device. This feature could make podcast content more viable for brands on YouTube. Podcasts have seen a huge resurgence in popularity in the last year or so but YouTube hasn’t really been a place to go for podcasts because of the lack of portability and the fact that the app must be front in center for the video to play. This could fix that problem. This could improve the engagement for your brand on the YouTube platform because you would no longer have to redirect them to another service to get your podcast and the more video they watch or listen to in this case the better the engagement of your channel. It will also allow mobile device users to multitask on their phones while watching a video. For example, you will be able to listen to a video while you check Facebook and send a text message.
It is interesting to me that companies like YouTube can make more money selling subscriptions than ads. Are people willing to pay for what they used to get for free? The networks have locked the majority of their content down to protect their relationships with the cable companies and I am not sure this is working for them.
Brands would be smart to make sure their content is worth watching now so that, as this progresses, they have subscribers to their channels already and won’t be affected as YouTube views move to the ad free model.