By Adam Fraser
The recent announcement from YouTube in relation to its launch of YouTube Red has multi faceted implications.
YouTube Red offers ad free access to all of YouTube’s video content with the option to save videos to watch offline on any device, as well as access to a new YouTube music service, all for US$9.99 per month. The subscription based business model represents a strategically significant move away from an advertising only revenue model. The rapid growth of ad blockers has shown how most consumers feel about ads so it will be interesting to see how many feel this aspect alone justifies the subscription amount.
Given the growing pervasiveness of ad blockers on top of questions around the overall efficacy of pre-roll video ads, some would say this is a necessary move for YouTube. It may take time to “train” users to pay for something they have historically had for free, but over time this represents an important shift in the YouTube business model. Eggs in more than one basket revenue wise.
Content wise things just got more interesting. In addition to the existing backlog of videos, YouTube has announced many of its “YouTube stars” will be distributing exclusive content on the Red channel. Original and premium content. Is there a budding Netflix here perhaps?
However the sting in the tale of this story is the terms and conditions YouTube is imposing on content creators here. Content creators are being asked to sign up to the new YouTube Red revenue sharing arrangements or their content simply won’t be shown. Yep it’s that black and white. Play by our rules or your (possibly millions of) existing followers won’t be seeing your videos any more.
I have talked previously about the social networks being “rented land” when it comes to your media distribution. Not since Facebook “reachgate” has this been so clearly illustrated in a policy change from a major social network. Yes the Godfather is used as a visual in this summary of the issue from TechCrunch! YouTube has every right to change the rules on its own platform but the lesson still hits hard to content creators who have built audience on a third party’s platform and now realise their lack of underlying control.
YouTube claims 99% of video creators (this only impacts those currently collecting revenue share from advertising on their YouTube channels) have signed up to this (literally) take it or leave it deal. But some high profile names have already had content removed from YouTube (eg ESPN).
The dilemma here for video content producers is similar to that faced by publishers considering whether to distribute via Facebook and lose control of their media IP. Rented vs owned. Generally large audience versus smaller.
Short term deal with the 800lb gorilla who controls much of the worlds video watching audience (but lose direct control of that audience and your own content)? Or try to build owned media and drive audience to your own site/app/video playing service? If you are Disney or ESPN or BBC or Red Bull this may be a practical dilemma to even think about. To the average marketer or business – hard to even think you could practically invest in building your own video distribution platform.
No easy answers here. The landscape is changing. And the potential for a small number of powerful platforms to control the vast percentage of media consumption grows.
The world of the media gatekeeper my somewhat ironically be returning in the Internet age.