In the past, I sometimes wondered whether or not the YouTube free service to humankind could be sustained. Besides allowing you to create video contents and distribute them for free all over the world, you can learn about the cultures and music of people from all over the world, such as the diverse musical and art heritage from the African continent. In fact, you can upload virtually any socially acceptable content to YouTube. So because of this high level of usefulness, I sometimes thought about the platform’s monetization mode, with the hope that the free service would continue. Well, that was before I learned of the financials of YouTube. I now know that Google, the owner of YouTube, will just be fine. In fact, YouTube has become a cash cow for Google. It is the most popular video service in the world, as folks are spending less time watching television and more watching YouTube videos on their tablets and smartphones.
According to a New York Times article by Conor Dougherty and Emily Steel on 21 October 2015, YouTube has become one of Google’s big growth drivers, with estimated ad revenue of $9.5 billion this year. To push the envelope and squeeze out even more revenue out of YouTube, Google will be introducing YouTube Red on 28 October 2015 in the U.S., and a bit later elsewhere, at the cost of $9.99 per month. Although I find the name of the new service a bit odd, I guess it’s what’s inside that really counts. As with Google’s main source of income - Internet search, the monetization of YouTube is via the interrupting advertisements that pop over YouTube videos. That is, the periodic ads that pop up as you watch a video in YouTube generates the revenue for maintaining the service. In the above referenced article, Robert Kyncl, the chief business officer at YouTube, was quoted as saying that: “the number of advertisers running campaigns on YouTube was up 40 percent over the last year and that the top 100 advertisers had increased spending by 60 percent.”
I’ll now tell you the features of YouTube Red in comparison to its subscription-free version. The features are many, so you better tighten your belt. You will be able to have YouTube without the ads, which can be very annoying, but you really didn’t have a choice before now. Another important feature is the ability to download videos and playlists so you can watch them offline on your smartphones or tablets. You can also watch videos while you are using other applications such as email. Starting sometimes next year, you’ll get “YouTube Originals,” which will represent extra contents by professionals, and could come in the form of reality series or popular television shows. YouTube Originals will also include scheduled programs from big-time media companies like Time Warner or 21st Century Fox.
YouTube has managed to sign on most of the leading independent creators, record labels, TV networks, and movie studios into the YouTube Red program. Thanks to Google’s arm-twisting and its use of the big stick: “Any partnered creator who doesn’t sign the deal for YouTube Red will have their videos on the ad-free old-school YouTube hidden from view.”
When you subscribe, your membership extends across all your devices (smartphones, tablets, desktops) and anywhere you sign into YouTube. You will also have access to the recently launched Gaming app, as well as the new YouTube Music app that was also launched last week Wednesday. YouTube Red works with Google Play Music, which means that when you subscribe to one, you automatically have the other.
While you pay $9.99 monthly on Android devices, the cost is $12.99 on iOS (iPad, iPhone), to cover Apple’s in-app purchase tax. The launch date of 28 October 2015 is for U.S. residents only; residents of other countries will get access soon. In addition, U.S. residents can try YouTube Red for free with a onemonth trial on October 28.
The landscape isn’t going to be pretty for competitors like Apple Music or Spotify. This is because YouTube Red doesn’t just offer ondemand music, but everything on YouTube, without those annoying pre-roll and pop-over ads. Of course, Apple Music and Spotify themselves have made some progress on video; however they don’t come close to YouTube. With YouTube Red, it would seem that competitors have already lost. Apple’s iTunes was very hot a few years ago; helping to propel the company to stardom from relative obscurity. Now, iTunes and all that Apple Music may as well belong in the days of the dinosaur, in the face of YouTube Red. You must love technology for its trendiness.
As far as consumers are concerned, I expect there will be two kinds of reception. There will be those who feel that the introduction of a paid service is rob, as these folks probably have their means of freely downloading YouTube videos and playlists, anyway. Others, perhaps from the poorer developing nations, may fret over the problem of securing the method of paying for the service - credit or bank cards. The other perspective is typified by what I am going to do. With just $10 per month, I am pretty sure I’ll get on the subscription list for YouTube Red when it becomes available in two days. I’ll probably get on an annual subscription to minimize unnecessary risks (associated with credit card processing) and the workload. For me, the ability to legally save videos and playlists to watch offline is just too attractive to pass. In fact, it’s like acquiring all the videos in the world for $10, and you can do this “month-in-month-out.” Needless to say I’m a bit sold on Red.