YouTube is undergoing its biggest shift since it started serving advertisements by, ironically enough, getting rid of them.
On Wednesday the Google-owned video site unveiled YouTube Red, a subscription service that grants users ad-free viewing across all of YouTube, access to Google Play Music, and other perks for $9.99 per month.
The free ad-supported version of YouTube will continue on mostly unabated as it has for the past decade. But the new initiative marks the beginning of a new chapter for the world’s largest video site. While YouTube has experimented with subscriptions for individual channels in the past, Red marks the first time the company has thrown its weight behind a sprawling, all-you-can watch subscription package similar to Netflix or Hulu.
So far, YouTube creators have expressed cautious optimism for YouTube’s strategy. Some are excited about the potential prospect of earning more revenue. They also praise YouTube for working with its homegrown stars to build out Red, rather than pivoting towards established Hollywood players. But there are also doubts about whether a meaningful chunk of YouTube’s youthful user base will really pay for video content.
Part of Red’s pitch is offering content from YouTube stars that won’t be available on the free version of the site. Production company Rooster Teeth is among the creators making original content for YouTube Red. Its first feature film, a comedy called Lazer Team, will debut in theaters in January and on YouTube later in 2016. For Rooster Teeth, partnering with YouTube offered an opportunity to stand out compared to getting lost among the thousands of films available on more established premium streaming services.
“If we were to go on another traditional video on demand service, our movie would go up and we’d be an icon in a list of icons,” says Burnie Burns, chief creative officer of Rooster Teeth. “YouTube has a history of honoring their creators, the people who have built those thriving businesses.”
Others are taking a more wait-and-see approach. “From our perspective, it kind of depends on how people end up feeling about the product,” says Hank Green, one half of the YouTube duo “the vlogbrothers” and co-founder of the online video conference VidCon. “We do a lot of waiting and seeing with new things that happen on the Internet these days.” Green says he was approached about producing original content for Red, but is holding off for now.
Some creators have a sense Red won’t be an immediate hit. YouTube users have been trained for a decade to expect videos there to be free; changing that behavior will be difficult. Younger users in particular, YouTube’s key demographic, may be tough to convert. “If I’m a 15-year-old and I’m just clicking through two-minute clips and I have an option to get out of [seeing ads], I wouldn’t pay,” says JR Jackson, who runs the the sports channel JRSportsBrief.
Still, there’s little existential dread about Red meaning the death of YouTube as a platform where aspiring stars can build media empires from nothing. Creators generally welcome experiments that can help them make more money, like the individual channel subscriptions YouTube launched in 2013 and the virtual tip jar that appeared in 2014. Still, questions remain about exactly how Red will affect creators’ bottom lines. YouTube has only said the “vast majority” of the new revenue will go to creators, and it will be divvied up based on watch time. But it’s very likely Red will increase the total amount YouTube doles out.
“[Red] is another expression of YouTube’s desire to build an actual economic system around content rather than just trying to leverage content that just happened to be created like how Twitter or Facebook or Tumblr would,” says Green. “It seems in line with the ethos of YouTube.”
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