The announcement of YouTube’s new paid subscription tier has the streaming industry talking — and conversation is coming from all angles.
There is still a lot that is unknown about YouTube Red, such as when it will roll out beyond U.S. borders, whether or not its premium content will mimic linear TV formats, and, most importantly, if people will buy in.
StreamDaily spoke with a number of industry insiders to get the inside scoop on how they think Red will shake up the SVOD world.
Kathleen Grace, chief creative officer at New Form Digital
Kathleen Grace (pictured), who previously worked for YouTube and helped establish YouTube Spaces worldwide, said Google is likely banking not just on digital-hungry millennials, but also the parents of Gen Z kids.
“It makes me think of my brother and his kids,” Grace told StreamDaily of the new ad-free service. “I think he’d probably want to pay so his kids didn’t see ads on the platform they watch, and I think a lot of parents would actually rather their kids not watch so many ads.”
Children will also be particularly influential in the success of YouTube Red because they like choice, Grace said. In addition, “short-form content plays well with kids, and it’s not because they have short attention spans. It’s because they like to have a lot of different things to choose from and quickly move on to the next thing.”
Grace doesn’t agree with those who believe that demand for subscription services is decreasing (due, as the arguement goes, to a deluge of SVODs on the market this year). Personally, she said, she’s likely to subscribe.
“I’m a cord-cutter. I haven’t had a cable subscription in years. So I get my Hulu, my Netflix, my HBO Now. I’m (also) a comedy nerd, so Seeso might appeal to me, and I’ll probably get YouTube Red,” said Grace.
Kaan Yigit, president of Solutions Research Group
Kaan Yigit believes the public appetite for SVOD is higher than ever.
Even with Netflix, Hulu, Amazon Prime and HBO Go in the U.S., “you have limited service at the moment,” he said in an email.
On the surface, YouTube Red may simply seem like a way to watch videos you can already watch for free without the disruption of advertising, but he thinks Google has bigger plans to place itself directly alongside the current SVOD giants with long-form serials.
“Google is creating the platform as kind of a placeholder,” he said. “Ultimately, (it will compete) with all of the above, using a (combination) of indigenous content, originals like Netflix, as well as licensed content.”
Yigit believes that, while the early days of YouTube Red might not see overwhelming success, a few high-profile signings could lure in subscribers.
Richard Raddon, co-founder and co-CEO of Zefr
Count Richard Raddon among those who believes YouTube Red has a strong shot at success.
“I think they’ve succeeded already in giving users an option … and as long as the metrics work out, the creators actually see as much or more money and everybody wins,” he said.
That said, Raddon isn’t convinced the service will attract more than what he termed a “modest” amount of viewers away from the original ad-supported service, suggesting
that a target of 20% to 30% may be overly optimistic.
What that means is, advertisers don’t need to be concerned about being cut out: “Clearly there is a ton of scale and still be a ton of audience watching content on this platform for free and are, therefore, available to receive brand messaging,” he said.
Ultimately, Raddon sees YouTube’s move to Red as a call to action to brands: “They need to be smarter in how they target (viewers) on this platform and on other platforms. I think the days of ‘spray and pray’ are over for brands and agencies. Not only can it be pretty ineffective, but it can be far more damaging than just the cost of the media you are doing (the ad) work with. It has a lingering effect and leaves a bad taste in consumers’ mouths and you are opening yourself up as a brand to disintegrating some of the brand loyalty that you’ve built up probably over years.”
with files from Darah Hansen