YouTube Red: a sign of the times

Enrique Dans
Nov 2, 2015 · 3 min read

The launch of YouTube Red, the $10 a month advertisement-free version of the video-sharing website, should be seen very much as a harbinger of where the online advertising industry is headed.

First announced a year ago, the service is more ambitious than it seems. Aside from making clear its commitment with the whole generation of content creators they sparked that the pay option would make them more money and that the company would pay them during the free trials for users, YouTube has also made it clear that there are no choices here: either content creators accept that their videos are available as part of the option, or they can take their videos elsewhere.

Time has run out: if YouTube, bought by Google in November 2006 for $1.6 billion, is still not making money despite the huge traffic it generates, then a change is required. The new offer, aside from sparking change subscription-based services such as Spotify or Apple Music, is being seen above all as a response to the growing use of ad blockers. For many people, among them myself, YouTube’s advertising was unbearable, and one of the main reasons I installed an adblocker.

How is YouTube going to convince the 40 percent of users that have ad blockers to pay for something they were already watching without advertising? The service’s additional features, such as offline reproduction or to be able to listen to music on their smartphone while using other apps are appealing, but are they enough to make people pay?

The big question is whether Google will offer YouTube Red as a traditional freemium service, or if it will make life difficult for those who continue to use it with an adblocker. Denying adblocker users access might seem aggressive, but once you have offered a pay option, and given the broadband costs involved, it might make sense.

In the case of YouTube, which has the biggest collection of videos in the world, as well as a huge number of content creators that use it exclusively as the showcase for their talents, this changed approach could have a huge impact. Arrogantly trying to prevent people with ad blockers from accessing your content when your products can be accessed in many other places is not the same as when your content has been created for your platform and in all likelihood wouldn’t exist if it weren’t for you. As its name suggests, YouTube is pretty much responsible for the phenomenon known as youtubers, and now, the content created by those youtubers could be a key factor in prompting some people to pay for its services.

For the moment, Google has not done much to fight the ad blocking phenomenon, aside from paying to be whitelisted by Adblock Plus; it’s not denying access to its content or preventing people from installing it. Will this change with the launch of YouTube Red? Will Google wait to see how popular its service is and whether people are prepared to pay for it? The launch of YouTube Red will not only change the web’s most popular video viewing service, but will point the way forward for online advertising.


(En español, aquí)

Enrique Dans

On the effects of technology innovation on people, companies and society (writing in Spanish at enriquedans.com since 2003)

Enrique Dans

Written by

Professor of Innovation at IE Business School and blogger at enriquedans.com

Enrique Dans

On the effects of technology innovation on people, companies and society (writing in Spanish at enriquedans.com since 2003)

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