YouTube Red: An Offer You Can’t Refuse

Over forty years ago the Corleone family make a few offers that couldn’t be refused. This week, Youtube proved who’s the Godfather of the Internet.

YouTube Red And The Offer You Can’t Refuse

Youtube Red is coming next week, and it’s a big deal; opt for YouTube Red over the Youtube you’ve been using for about a decade and you’ll be able to see videos without advertisements (more on that in a moment), save videos for offline use, and get access to both Google Play Music’s full streaming library and the original video programming that Youtube has in production, all for the same ten dollars per month that Play Music costs now.

It’s a great deal. By rolling Youtube video and streaming music together, Youtube Red becomes the only source you should consider for streaming music. Game over, Spotify and others; go home. Youtube Red both legitimizes streaming music in a way that didn’t exist until now and corners the market on value equation.

And that’s not even the story that matters for Youtube Red.

With Youtube Red, Google Alphabet creates a huge problem for Apple’s iTunes business model. Why? Because if you buy YouTube Red as an iOS App, you’ll pay an extra 30% to cover the fee Apple charges all app developers.

That might mean that iOS users will stay away from Youtube Red, but I doubt it. And the irony of Youtube Red being the disrupter of Apple’s 30% developer tax when Youtube charges video producers a 45% tax to run advertising campaigns is pretty amazing. But there it is.

And then, the Youtube Red business model gets even crazier.

If Youtube Red takes advertising out of videos, the question becomes how people who make a living from video-related advertising revenue will continue to make a living (cue dramatic music and a link to our sister service Video Network One). Sure, there will be revenue sharing of the Youtube Red monthly fee, but it seems unlikely that money will be disbursed to the Youtube success stories at the same level as “you get a percentage of the advertising revenue”. And if you aren’t an official Youtube partner, Youtube Red can only mean that your advertising revenue is going to drop.

Oh yeah: and if Youtube Red allows video downloads, there are going to be some major copyright questions to be answered.

You still need to be producing video for your business website. And maybe Youtube Red is the service that finally pushes you over the edge toward paying for the hours of background noise you consume each day.

And those two statements are at odds. Wanna talk about it?