Will YouTube Red Lead to More Green?

Y’know, I’d love for there to be a week when there’s not some big controversy going on.  But I guess if that happened, I wouldn’t have much to write about.  This week, it’s everyone omnipresent corporation, Google.  More specifically, YouTube.  Yesterday YouTube announced that starting on October 28 people can sign up for YouTube Red, which is essentially a paid subscription to view ad-free videos.  In case you weren’t aware, most sites, YouTube included, place ads on their sites to generate revenue while providing their services for free to the consumer.  It’s like how back in the day TV used to be free because stations got paid to run commercials.

Before getting to the meat of this article, on people’s reactions & whether or not this could be a viable strategy, let’s start with the facts.

  1. YouTube Red is a completely optional subscription.  YouTube as we know it, with ads, isn’t going anywhere.  I’d like to think Google has been too successful to be stupid enough to completely eliminate that source of revenue.
  2. YouTube Red will run a fee of $9.99 a month.  I believe there is a free one-month trial when you first sign up.  I’ve also seen articles stating that users who sign up for the service through different platforms may be charged more.
  3. YouTube Red will actually include 3 services in 1.  The core part of YouTube Red is access to their ad-free service, with new features for video viewing, including downloading videos to watch offline & having videos play in the background while you run other apps.  The other two services the subscription gives you access to are YouTube’s recent music & gaming programs.  Admittedly I know little of these, because I don’t use them, but the fee does give you full access.
  4. Starting next year, new content will be available solely for subscribers.  What specifically goes behind the pay-wall is up to the creator, but YouTube has listed several new series that are being created solely for this project.  Some of the channels involved include PewDiePie, Rooster Teeth & Tobuscus.

Now for the nitty-gritty… the reactions.  I’ve seen reactions to this news run the gambit of excitement, hopeful optimism, rage, mistrust, & couldn’t-care-less.

Proponents of this subscription model claim at the service will allow content creators more freedom & extra income.  Under YouTube Red, creators receive a 55% split of the revenue they generate.  Proponents have dismissed fears that this program favors the larger channels.  In a post by John Bain (TotalBiscuit), he explains that the method of revenue sharing will work differently than regular YouTube.  As best I can understand, content creators currently get paid so many cents for every advert viewed on one of their videos.  So while it’s not exactly that they get paid for every view (longer videos can have multiple ads) it’s pretty close.  But in the new Red system, it’s based on time spent watching your videos.

The sub money is split via minutes watched, not by view numbers.  While it is more likely that a larger channel will have more Red subs overall than a smaller one will, there is nothing at all stopping a smaller channel from producing long-form compelling content that gets a good number of minutes watched per month per Red user.  If anything, Red is an equaliser, it helps small channels far more than the current ad supported system does and why wouldn’t it?… I repeat, on how much YOU WATCHED THEM, NOT on how many views their videos got.  Red benefits channels that have grown dedicated audiences that they can hook in for long videos, regularly.  If you can’t do that, regardless of your channel size, then you have bigger problems.  Small niche, passion-driven channels stand to benefit greatly from this if they play their cards right.

But there are just as many detractors, some of whom bring up some very valid points.

The biggest hurdle, obviously, is how to get people to pay for something that was previously free.  All I need to do is point back to my article on when Steam tried to start a paid modding community for Skyrim, & the sheer amount of vitriol it stirred up.  Hell, I’m pretty sure there were some modders who left the community after that because they were essentially railroaded.  Clearly YouTube is trying to combat this by offering exclusive content, but whether that combined with not having ads interrupt your viewing is worth the price is up to the person in question, especially in light of adblockers (which I don’t support using).

Another concern is that YouTube doesn’t alienate their regular sources of revenue.  I doubt Google will give up a huge source of income, but it is possible that some companies may not be happy with this new program that might cut in to their bottom line.  And if companies start pulling out, original YouTube might become a thing of the past.

But most distressingly, in my opinion, are claims that YouTube is strong-arming content creators into agreeing with this program.  According to Robert Kyncl, YouTube’s Chief Business Officer, 99% of content creators have signed contracts agreeing to participate in the revenue sharing model.  Even if the creator isn’t involved in creating the new YouTube Originals, they still have to agree to participate so that their videos will be available for viewing by both paid & unpaid viewers.  If they don’t agree, their channel wouldn’t be viewable on Red.  However, several sources, including a Fortune Magazine online article, report that channels had little choice in the matter.

YouTube confirmed to TechCrunch that if creators who earn a cut of ad revenue refused to sign the deal, their videos would be completely hidden from public view.  They wouldn’t appear in the YouTube Red ad-free service, nor would they appear on YouTube’s regular ad-supported service.

In other words, if you’re a content creator, as defined that you monetize your videos, & you don’t agree to the Red contract, your videos wouldn’t be available even on the original site.  All of your videos will become “Private” which would mean people can’t access them without being actually given the site address.  In short, no one could view your videos, you’d make no money, & be done.  It’s all or nothing, even if you don’t plan on actually doing anything special for Red subscribers.  I don’t think I need to go into detail about why this is a horrendous tactic.  Let people who want to pay, pay, but don’t take away channels’ options.

This also brings up the question of how newer channels can get a piece of the action.  I’ve seen responses to YouTube’s official announcement page where users have asked how to become a part of Red.  It’s unclear what the criteria for being offered a contract was.  Was it everyone who monetizes their videos?  I’m subscribed to both “professional” YouTuber channels & those who do it just for fun, & I haven’t seen anyone comment on this issue.  In the future, how will growing channels be able to monetize?  Will they have to go through the added step of signing the Red contract?

In my personal opinion… well, I won’t say I don’t care, because I do to the extent that this might mess up something that I enjoy using.  But I know I won’t pay for something I can get for free.  I’m very stingy (or cheap, in my mom’s words).  I’m one of those people who blatantly refuse to pay for any app on my phone.

On the one hand, I can understand wanting to expand business ventures & make more money.  And I can understand the channels that support this move.  I don’t begrudge anyone new opportunities, especially when it comes to making a good, viable career.  Whether I think this is a “good” career move just in terms of potential backlash, I don’t know.  And with the sheer amount of money Google has poured into this thing, I don’t see them backing down easily.  I think they’ll push it as much as they can.  And I get keeping up with changes in trends & technology.  That’s how businesses stay relevant.

But that doesn’t mean I’m not incredibly leery.  Personally, I don’t like this business model.  I think if Google isn’t careful, they’re gonna spread themselves too thin & tick off all the people who got them where they are today.  As my grandfather would say, their eyes are bigger than their stomach.  YouTube alone is estimated to bring in $9.5 billion in ad revenue for Google this year!  At what point do you sit back & say, “Y’know, I think I have enough money.”?  It’s better to do one thing really well than do everything badly.  I think YouTube should stick to being YouTube & not bother going after the Hulus & Netflicks of the world.  YouTube is meant to be about the creators, not the company.

For now, we’ll have to wait & see.  As I said, I doubt Google will give this up without a fight.  I just hope it’s not a catastrophe.  Pride comes before the fall, after all.



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One response to “Will YouTube Red Lead to More Green?

  1. Pingback: MrLuvva’s Luv-In #24 | mrluvvaluvva

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