Whenever a free service adds a paid option, everyone involved is going to get concerned. YouTube’s introduction of a paid subscription option called YouTube Red has shook the world of online video with creators, brands, and viewers all worried about what the $9.99 a month ad-free service will mean for them.
YouTube certainly did very little to reassure the thousands of creators and influencers that make video content for the site. With a requirement that all content uploaded to YouTube be available as part of the paid option (or else it would be made ‘private’), creators who rely on advertising revenue from their videos were given no real opt-out choice. While YouTube says 99 percent of creators agreed to participate, some professional content creators like ESPN had no choice but to remove content from YouTube due to agreements with other subscription services.
How Will YouTube Red Affect Influencers
The shaky nature of advertising income that so many creators on YouTube survive on makes it more likely that creators would take one-off endorsement deals even if featuring a particular product might threaten their highly-valued authenticity. As we learned from Essena O’Neill’s tearful rant last month, this can lead to social media stars feeling like they are losing the very identity that helped them build a relationship with their audience in the first place.
PewDiePie, one of the biggest YouTubers around, has already expressed support for YouTube Red’s model for this reason. He notes that with the advent of ad-blockers that cut into as much as 40 percent of advertising revenue, YouTube Red is a way for creators with a smaller following to make more money since they will get paid when subscribers watch their content.
With the potential for regular subscription earnings from participation in YouTube Red, video creators can feel less pressure to sign up for one-night-stand advertising promotions. Instead, they can focus on creating great content and working only with brands that truly align with their passions.
What Does YouTube Red Mean for Brands
Vince Juarez, Principal at ION, the Influencer Orchestration Network, notes that YouTube Red will show brands and creators both how deep an influencer’s relationship with viewers has become. “We’ll quickly see if these influencers are so popular because the content was easily accessible and free of charge or if they have built a strong enough connection with viewers to move them to a paid model. Look at Spotify. While about 20 million of their 75 million users are subscribing, they’re trying to increase stagnant paid subscription growth by working with their biggest stars to gate content for just paying users.”
In fact, YouTube Red is already planning premium gated content. In addition to including Google Play’s music subscription with YouTube Red, it is also funding higher quality content from existing YouTube stars the network helped create like Tobuscus, Rooster Teeth, and MatPat. Some might question whether audiences will flock to content like Scare PewDiePie on YouTube Red like they do Orange is the New Black on Netflix or Game of Thrones on HBO Go.
Although these creators come with built-in audiences and the relationship influencers on social media build is deeper than that of traditional actors, keep in mind that the jury is still out on whether social media stars can translate to other mediums. Smosh: The Movie, launched earlier this year, was briefly a top download on iTunes but it quickly showed up on Netflix. The first real success in the space was Camp Takota, a comedy starring YouTubers Grace Helbig as well as Hannah and Mamrie Hart. It was no theatrical blockbuster but it recorded hundreds of thousands of downloads at $10 each without any traditional marketing costs. Of course, these features didn’t have an option to watch them after a few ads.
Juarez added, “At the end of the day, it’s smart move for YouTube because it allows consumers to have things their way. These viewers are accustomed to having immense control over what they watch and this just adds another facet to that experience.”
Of course, even if YouTube Red gets signups from just a few percentage points of their billion-plus user base, that may be enough to help this Google business unit that remains unprofitable despite over 4 billion dollars in revenue during 2014.