Is YouTube Red the Future of the Internet?

The Turning of a Red Tide:

YouTube entered a brave new world last week as it released YouTube red.  This move represented a shift in new Internet paradigm as one of the world’s largest marketing platform is now taking steps to adopt a subscription-based model.  This may not seem like a revolution for the world of video media.  Ever since people began recording content they have been selling it. Movies charge admission, cable charges subscriptions, as do online streaming sites such as Netflix and Hulu, so it seems only natural that YouTube the content provider would do so as well. However YouTube is not purely a content provider. At its core it has always been a social media platform. As a widely adopted social media site the monetization strategy for YouTube has focused around selling ads, the same as Twitter and Facebook.  Now with YouTube Red, YouTube is in many ways pioneering a new business model for web giants who have thus far offered services in return for eyeballs to flash ads at.

Two factors drove YouTube to adopt a subscription-based model and they will continue to shape the web going forward:

1. Ad Blocker

It is incorrect to think that YouTube has ever actually been a free site.  In fact the saying ‘there is no such thing as a free lunch’ aptly fits most the world wide web.  The price you pay to access content is not monetary, you pay something far more valuable — your time.  Marketers are desperate to grab your focus for even a second to get a message across.  This is what funds the majority of websites you visit and YouTube is no exception.  That is why Ad Blockers are so scary; they threaten the very balance of how content is delivered on the web.  With over 198 million computers running ad blockers and growing, the time-in-exchange-for- content proposition is broken.  If the trends persist, and people continue to implement Ad Blockers at the current rate, content providers will no longer be able to provide content solely in return for your time.  YouTube is hedging its bets against a future where ad blockers are ubiquitous and content is no longer free, by expanding into a subscription based revenue model.

2. Content Creators:

YouTube is a platform that has helped propel its own content creators into stardom. Now, YouTube celebrities are superstars in their own right and are some of the most influential people on the web. Armed with a sea of dedicated fans ready to mobilize at their idols’ whim, YouTube’s biggest names have serious clout.  YouTube’s decision to leverage the personalities their site has created is a testament to just how popular YouTube Celebrities are.  It is also a clear indication that these stars no longer need YouTube as a means to profit off their content.  If fans are willing to pay YouTube a fee to access their favorite YouTubers, then those fans will follow those personalities wherever their videos go.  The leash has been cut and now some of the most popular content on the web could be available somewhere else than YouTube. Already other sites are preparing to, or are already hosting content from former YouTube stars behind a pay gate. Production companies, such as Big Block Entertainment, have begun creating videos and movies for YouTube celebrities with Hollywood quality production value.  What they produce will be highly-in-demand exclusive content that does not need the YouTube or YouTube red platform to attract an audience. Rather, sites with more favorable terms for the content creator will win their lucrative partnerships. 

If YouTube Red is a hit and if former Youtube stars find success branching away from the site, the future of the internet will be a vastly different place.