Youtube is making a big play to become profitable with a new subscription service called Youtube Red.
What do you get?
On the official Youtube blog Matt Leske, senior product manager explained, that for $9.99 a month, subscribers will be able to enjoy ad free content along with the ability to temporarily download videos. Along with this will come access to Youtube's massive music library through their new app Youtube music, which will work similarly to Pandora and Spotify.
Only available in the United States
For now, the new subscription is only available in the United States. This has angered many in other countries who pay $9.99 a month for Google Play music, while receiving no upgrades on the video side of things. Youtube did say that they will strive to bring the subscription service to other countries, but no direct plans have been announced. So for now people in any other country who pay for Google Play music, will be paying the same amount as people in the United States but only receive half the product.
How will creators make money?
For those who are unaware, many Youtube content creators are paid through the ads that people watch on their videos. With Youtube Red and the ads gone, creators will now be paid through a portion of the $9.99 subscription fee, based off how many minutes of videos the subscriber watches of your content. This will theoretically bring in more money to content creators, as the current advertising model brings in very little per view.
Why is Youtube doing this?
According to an insider source from the Wall Street Journal, Youtube is still not profitable. While, Youtube has become a media juggernaut and increased their revenues to 4 billion dollars, the video site is still just breaking even with the advertising model. This is a move to increase revenue and start bringing in profits without changing Youtube for those who do not want to pay.
Premium Content
Youtube Red will also bring premium, high-quality content that only subscribers can access. Youtube published a list of ten different shows that will star some of Youtubes biggest celebrities including "Pewdiepie," "The Fine Bros," and "Tobuscus." Some behind the scenes shots of Pewdiepie’s new show can even be seen in his vlog series that he posted last month. Premium content has caused some debate on the internet about how this will create a tiered class in the Youtube community between people who can and cannot or do not want to pay for the subscription. Before this, all videos were viewable by everyone on Youtube, minus the little know and used optional paid content feature. However, there are only 10 premium shows currently announced, a small number compared to the vast pool of free content, and all of the creators involved will continue to produce free content as well.
ESPN pulls videos
As part of the contract, a new terms of agreement has been sent out to all Youtube creators. This new terms of agreement allows Youtube to use the subscriber fee to pay creators. This will have little effect on most creators. However, ESPN found a major breach of licensing and has begun pulling down most of their videos. While ESPN has not released an official comment, many speculate that this has to do with their licensing agreement with cable companies such as Comcast. Many assume that cable companies only allowed the content to be put on Youtube as long as it was a free website supported only through advertisements.
The Worry over the name
Many on the internet have pointed out that the name Youtube Red is uninspired, bland and references a popular adult video site, Redtube. Youtube has not officially responded to any inquiries over the name. We can only hope that when global expansion of the service occurs, a name change will come along with it.
Will it work?
That is difficult to stay. It is definitively a necessary step as Youtube is a company and needs to be making a profit. However, some speculate that the goodies aren’t good enough and will attract few subscribers. Others worry about subscriber burnout as more and more subscription based online services continue to appear. A small number even wonder if Youtube will increase the amount of advertisement or shutdown ad-block to push people towards subscribing. Whether or not it does work out, this will have major ramifications for internet-produced content.
