SAN BRUNO, Calif. -- YouTube announced its new subscription service, “YouTube Red” is due to launch on Oct. 28, providing fans with “the ultimate YouTube experience,” according to the company’s blog. But many creators and fans are concerned the experience may not be worth it.
At $9.99 a month, subscribers may watch ad-free videos, watch exclusive YouTube-produced series, and have the ability to save videos to watch offline. The service also includes a membership to YouTube Music, which is comparable to Spotify; the music app will also allow subscribers to have access to Google Play.
Many creators favor the new service, as it will generate more traffic and increase revenue. When YouTube launched its partnership program in 2008, creators were given the option to place ads on their videos as compensation for their work--this then increased the popularity of “vlogging,” or video-blogging as a career.
Mackenzie Lynch is a freshman in college, as well as fan of YouTube. She claims she is unable to afford other subscriptions such as Netflix, and she is concerned she may get blocked from watching her favorite creators.
“I think it’s a good idea to help content creators,” said Lynch. “But the price range will drive away most fans.”
However, many smaller creators (less than 1 million subscribers) are concerned about their younger fans. YouTube’s top demographic is females aged 13-24. YouTube’s most popular content for that age category is How-To & Style, with a whopping 89 percent watching (OpenSlate via Digiday). It’s common knowledge that most teenagers and people in their early-20s can’t afford this many subscriptions.
Reports have circulated over the confusion regarding videos being made private in the event a creator does not update their terms to include the YouTube Red option. However, the creator must update their terms to prevent this, and non-subscribers to YouTube Red may still watch YouTube with advertising.
According to YouTube’s updated Partnership Terms and Conditions, only 55 percent of the revenue will go to creators. This is a much smaller percentage than Spotify and Apple Music, who pay 70 and 71 percent, respectively (via: Fortune).
The top 10 percent of creators are not using AdSense as their sole source of income. Most creators work through a network, which monitors their “CPM,” or the cost per every 1,000 views. About 45 percent of the revenue is taken out by the network, but the revenue is much higher than AdSense. On average, 25,000 views will pay out to about $25 through AdSense. Depending on a creator’s popularity, their CPM could rake in between $5 to $10 per 1,000 views. Based on this, YouTube Red has the potential to either make creators more money, but also make them even less money.
via Twitter / @gogreen18, @DanNerdCubed, @emmablackery
A YouTube spokesperson told Gizmodo that both creators and subscribers have asked for a subscription service.
“Today, the overwhelming majority of our partners, representing nearly 99-percent of the content watched on YouTube, have signed up. Videos of partners who don’t update their terms will be made private, but we remain committed to working closely with these partners with the goal of bringing them on board,” said the spokesperson (via: Gizmodo).
One of the many beauties of YouTube is the free content anyone may participate in. Whether that person is a creator or a consumer, a click on a video will equate to some form of compensation. Fans of YouTube are attracted to the site because viewers are not prioritized. With sites like Netflix and Hulu, those who can afford subscriptions may get extras. But, with YouTube, non-subscribers will still watch the same content they’ve been provided with since its inception. Therefore, is a subscription even necessary?
If YouTube wishes to remain competitive in the subscription market, the company needs to recognize their audience and lower the price. YouTubers releasing books, merchandise, movies, and other additional services to their subscriber base is more reasonable than paying $10 a month for creators they’ve been supporting through ads for years.
The service will launch on Oct. 28, with the music app launching a bit later. On the day of its release, YouTube is allowing a one-month free trial to test YouTube Red.