YouTube Red: Can it Make An Impact?

YouTube Red is the latest attempt by the world recognised video streaming site, in an attempt to compete on a global market. With the vast success of video streaming subscription rivals, including Netflix, creative minds have come up with the idea of YouTube Red, a subscription service which for $9.99 can get you access to premium features, as well as content exclusive to subscribers. This will not affect users who do not wish to sign up for the service however, and the majority of YouTube will still be available for free, although ads will still be a bane for those viewers without some AdBlock.

YouTube Red’s new premium features includes: A complete new ad-free experience, allowing you to browse through YouTube without the guilty feeling of denying your favourite content creators ad-revenue by using Adblock religiously; the ability to download videos and access them for later use offline, which is a service people have been requesting and traditionally relies on outer party services for downloading videos. There is also now the ability to swap between mobile device and have the video playing the background -- a service requested for years by many of the sites users-- and finally, exclusive content only viable to those with YouTube Red accounts, primarily funded and created by the money generated with YouTube Red subscription, meaning that the more subscribers, the more content that can be created a la Netflix.

Despite not being the first time YouTube have tried to introduce a monetising system into their video streaming service, previously an attempt to charge $0.99 to access certain videos/content creators was largely ignored by both the community and their creators, YouTube Red has a much higher profile. The cost of $9.99 may be seen as mimicking of Netflix’s cost (also $9.99). The massive financial success of the Netflix service has provoked a response from the world of entertainment, with providers such a Hulu, HBO and even Amazon seeking to find their own places on the market. Rather than arrive on the scene empty-handed, YouTube Red seeks to revolutionise the realm, offering dual subscriptions to YouTube Music, formerly hosted under the Google Play’s music streaming service. A subscription to YouTube Red will also get access to YouTube Music for no additional charge, and vice versa. Already existing subscribers of Google Play’s Music offer will simply be granted access to YouTube Red without additional charges. YouTube’s decision to diversify their content and branching out into the subscription service has been deeply inspired by the big success of Netflix’s "Original Series."

What this means for content creators across the digital site remains unclear. For the “YouTube Royalty” (PewDiePie, Tobuscus, TheFineBros, et cetera), YouTube Red provides a pretty sweet deal. Those signing on board with the new service are promised a varying percentage cut of the subscription money. The percentage will increase or decrease depending on a variety of factors: minutes of content watched; views totalled, and so on. However, the YouTube Royalty are set to profit heavily, with personalities such as Tobuscus, or even College Humour, getting sponsored shows.

For lesser known YouTube sensations, the effects are unsure. Some are even attempting to diversify their content, in an attempt to protect against any form of major backlash from the community. For many diversifying means hosting livestreaming on YouTubes other main rival; (a video livestreaming site, famous for its emphasis on video game streaming). In response to the growing threat of, YouTube announced ‘YouTube Gaming’ several months ago in an attempt to reel back consumers. While finding initial success, it has done little to deplete Twitch’s devoted audience. It could easily be argued that YouTube Red is another attempt at reclaiming its audience from Twitch, by promoting exclusive content and promising bonus features.

What this means for content creators across the digital site remains unclear. For the “YouTube Royalty” (PewDiePie, Tobuscus, TheFineBros, et cetera), YouTube Red provides a pretty sweet deal.

Before YouTube Red, YouTube’s main source of revenue was advertising. 45% of the revenue would go to YouTube, while 55% would be handed over to the content creators. However, the money made through advertisements was relatively small compared with the potential profits from the new system. YouTube famous PewDiePie claimed that plugins like AdBlocker, which blocks advertisements across any websites, can block up to 40% of gross ad revenue and seriously hamper the service. He even commented that subscription services are a response to that potential revenue loss. With the relatively small amount of revenue provided by advertisements, it is clear why subscription makes more corporate sense. The service is currently only available in the U.S.A, but even if only 5% of the American demographic jump on board the YouTube Red subscription service, they will already have met their goals.

YouTube Red is a turning point in internet history. While it is unlikely that the service will make a major impact, if any, on how most of us consume our online content, it shows the sign of changing times, as more and more services are pushing for stricter exclusivity and the focusing towards premium content. With this in mind, comparing digital giants YouTube and Netflix would be inherently disingenuous. While they both provide similar forms of content, the demographics are widely varied. For YouTube, the demographic is typically much younger on average than Netflix, which aims at a slightly older audience. They do overlap in different areas but on the whole, they are largely independent of one another.

YouTube’s drive to provide a premium service is most likely inspired by Netflix, rather than as its competition. Facebook however, is a serious source of rivalry as over 4 billion videos are viewed daily on the platform, directly taking away from YouTube. As of September 2014, Facebook reported that videos on their site were being viewed up to 1 billion times a day. A year later, this figure jumped up to 4 billion daily views for the social media outlet. While many of the videos are repeated links to YouTube, allowing the website to benefit from the views, more and more people are uploading to Facebook directly, bypassing the middle man altogether. If YouTube videos are re-uploaded onto Facebook, YouTube will lose ad revenue. This has serious ramifications for the video streaming site, as more and more content is now being diverted away.  Under a subscription style service however, the damage undertaken by this kind of reposting onto various sites will be lessen significantly.

The new premium content provided under YouTube Red will also be targeted towards the younger demographic. We see this in the teased ideas for the site such as PewDiePie’s new horror focused prank show, TheFineBros new musical based show, as well as variety of other YouTube creators more popular with younger demographics.