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YouTube Red: Red Alert For Businesses

November 13, 2015 - Fifteen

What is YouTube Red?

YouTube Red is a paid subscription service launched by YouTube towards the end of October. For a monthly subscription fee, users are now able to view YouTube videos without ads, download videos for offline viewing, and play videos in the background on their smartphone or tablet.

There’s been a lot of discussion about how YouTube Red will affect musicians and content creators in the community, but how will it affect businesses?

Smaller Audience?

Many people have been trying to find a way around YouTube’s ad-centric videos for a while now. It’s a simple fact that has led to Google’s decision to introduce their new paid service. Because they achieve so much of their income from ads, and because so many people are finding ways around viewing them, YouTube have decided to take a different route to generating income.

What this means though, as more and more people move over to the subscription service, is that the potential audience for paid video ads will start to dwindle. What was once an effective way of advertising to relevant audiences will slowly have less and less impact.

Less Engagement?

YouTube Red is heading in the direction of streaming services such as Netflix and Amazon Prime, with “YouTube Originals” already being announced, and YouTube encouraging creators to create exclusive content for the service. This makes sense for the preservation of their business, but doesn’t really take into consideration the countless businesses that have supported them over the years.

As YouTube Red becomes more and more premium, there may not be a place for brand-centric content or advertising. The very nature of YouTube Red is to eliminate advertisements from their site, and it seems that Google may become quite strict on the matter…

Account Deletions?

There are some creators (including big media companies) that aren’t entirely convinced about YouTube Red. With confirmation that they won’t get paid at all during the initial free trial period, and the amount of revenue some are already achieving from ad enabled videos, there is some scepticism.

This has apparently been met with some backlash from YouTube, with the New York Times reporting, “The executives said YouTube had implied that if they didn’t provide content for subscribers, there was a chance their ad-supported content would not be available on YouTube…”

Translation? If you are not able to supply premium, exclusive content for your viewers, YouTube will not support your standard account. This is also very clear in their terms and conditions for the service. Any creator wishing to opt out of YouTube Red will have their accounts set to private, meaning no-one will be able to view your content.

The death of video marketing?

Taking all the above into account, it’s hard to imagine a future of businesses using YouTube for advertising purposes going forward. With the removal of ads on videos, the demand for exclusive content, and the gradual decrease of viewership, we’ll be keeping a close eye on YouTube Red.

However, what this does encourage is for businesses to create more engaging content, and find more interesting ways to interact with customers. The digital world is becoming more and more obsessed with quality content being a primary marketing technique, and it seems that YouTube is following the trend. Rather than killing video marketing, it’s allowing it to evolve. Wherever YouTube and Google go, the rest of us will follow, so watch this space…

Want the latest digital marketing news and updates? Check out Fifteen’s blog.

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