Watch out, Netflix. YouTube is for you — or at least, it’s trying to do it.
Last October, YouTube announced YouTube Red , a subscription service for US customers that offers ad-free video, offline viewing, and free access to Google Play Music — all for just $9.99 a month. Now, YouTube is sweetening success with series original content its own, created in part with homegrown YouTube stars.
The move marks YouTube’s biggest attempt to compete with premium content-focused subscription services like Netflix and Hulu. But if YouTube Red’s ad-free model succeeds, it could have a huge impact on marketers. Let’s see why.
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Releases in the past few weeks include Lilly Singh’s documentary Trip to Unicorn Island the reality series by PewDiePie Scare PewDiePie AwesomenessTV’s movie Dance Camp, and the movie Rooster Teeth Laser Group – with other expected to come from YouTube Creators next year.
Based on the first round of shows and movies, it looks like YouTube wants to entice viewers who are already loyal to these video creators and are willing to pay for exclusive content. That’s not a bad idea; These creators generally have tens of millions of subscribers. But given that these viewers are largely millennial and millennial, the model might make others uninterested in spending $10 a month on new content produced by the people they love. never known before.
To put that into perspective, The average age of Hulu’s ad-free content subscribers is 33, which seems higher than YouTube Red’s content target audience. Also of note: Users on Netflix and Hulu don’t need to be familiar with previously published content to fully appreciate original shows.
As Digiday reported, it is it’s too early to let know the impact of YouTube Red’s initial subscriptions on the video platform, but it would be interesting to see if they release any numbers based on this new original content.
Interrupt pre-roll ads
As of now, marketers have largely supported YouTube by buying pre-roll ads, but YouTube Red could disrupt this pattern. If consumers are used to watching ad-free videos from their favorite creators, they may lose their tolerance for watching videos that are promoted by pre-roll ads.
Specifically, if Generation Z-ers and millennials start signing up for YouTube Red and watching less free content, that could hinder marketers from reaching them. In September, YouTube’s director of product management told Advertising age Product video views grew 40 percent from 2014 to 2015. And throughout the last year, YouTube continued to evolve its ad products, providing brands with new call-to-action buttons that help with shopping. easier. According to Adweek , some brands are already starting to get dramatic results from the changes. For example, Sephora has seen an 80 percent increase in brand consideration and a 54 percent increase in brand awareness.
YouTube brings billions of dollars advertising revenue each year. There’s certainly a chance YouTube Red could undermine that source of income.
Right now, the biggest argument as to why YouTube Red can be successful is because, unlike other original video providers, it has a built-in network of creators who know themselves. exactly what works on the platform. While brands won’t be able to rely on advertising, they can still try to get involved in the content creation process.
If YouTube prioritizes original content, the next step could be for brands to create their own shows for YouTube Red. Over the past few years, companies have become more ambitious in producing their own branded web series their on YouTube with varying degrees of success. It’s hard to predict whether a digital video will succeed, but at the very least, brands like Nike, McDonald’s, and Glacéau have shown the ability to create video content that can stand on its own without elaboration. public brand.
YouTube is not Netflix or Hulu yet…. But the fact that the popular free platform is experimenting with a paywall will be enough to keep marketers. And that must be a sign that it’s time to start thinking about new ways to reach YouTube’s massive audience.