In The “Red”
I have always loved YouTube, and have often opted for it as an entertainment route over Netflix or other video-based media outlets due to the fact that it was free, and easy to access as a general user. However, as I was browsing through a website last week, I saw a promotion for “YouTube Red” — a program which aims to launch October 28th. The goal is to create a subscription based service option, that offers an ad-free experience, along with original content available primarily to subscribers. For $10 a month, users can completely opt out of being exposed to advertisements — something that seemed surprising to me, as advertisements account for much of the company’s revenue.
However, YouTube has revealed that part of the motive for this subscription based model is to draw people in with their music and video services, as well as original productions — which could theoretically make up the lost revenue from advertisements. The relationship between digital media and online advertisements has always been a fairly dependent one — particularly in mobile media, so this subscription style method could have tremendous implications on companies that produce digital content, particularly on YouTube this year. Not only would an intentional relationship between consumers and producers be enforced, but the effect of wanting what you can’t have could also play a part in creating increased consumption of the media.
“As with its standard ad revenue-sharing program, YouTube will pay 55% of subscription revenue to partners, divvied up based on aggregate subscriber viewing time.”
Big media companies in the industry are partnering up with the Red program — expanding the power of YouTube over such groups as 21st Century Fox, NBCUniversal and Time Warner. While there are indeed positive implications in regards to networking and industry building, there are certainly unavoidable negative aspects as well.
An incident with detrimental effects has already taken place just this week — with the “scandal” of ESPN’s videos going dark due to legal and rights issues. According to YouTube, “partners that do not sign on for Red will have their videos pulled down in the U.S.”
This is a startling realization — public access to news and other digital is essentially being constrained by the new program. While executives claim to have “signed agreements with 99% of content partners to be part of the subscription service”, there are clearly going to be creators online that are affected negatively by this development (especially start up channels and other less established sources that still provide quality content.)
“YouTube is the most popular video service in a world where people are spending less time watching television and more watching video on tablets and mobile phones.”
Robert Kyncl, the chief business officer at YouTube, states that “people are embracing paid subscriptions for ad-free content at an incredible pace.” Taking this into consideration, along with the fact that YouTube has such a strong influence and control on media consumption, it is certain that this development has potential to have great effect on the media world and consequent creators by changing the way that online news and digital media are consumed.