YouTube Red: Google’s bold move into the subscription area

Since YouTube’s inception in early 2005, the video streaming platform has grown in terms of number of users, view counts and features.

The latest offering from YouTube, YouTube Red, is a new paid subscription model. Subscriptions are currently available to users in the USA at a cost of $9.99 per month for the web version and $12.99 if bought through the YouTube iOS app.

YouTube Red subscribers will be provided the following:

o The ability to watch videos ad-free

o Offline playback of videos on mobile devices

o Background playback on mobile devices

o Access to original, premium content – exclusive to YouTube Red subscribers.

For a monthly subscription, users can enjoy an ad-free environment and have the ability to download and consume content offline. Already, people are looking forward to commuting with downloaded content on their mobile devices, watching video on short haul flights or perhaps viewing their favorite videos while laying by the pool on holiday.

While this sounds very appealing for users, content owners need to think about the impact it might have on, exclusivity of content and content protection.
When YouTube Red was announced, YouTube Partner Program members were informed there would be a contractual change to allow integration of YouTube Red’s ad-free and offline viewing. It was stated that if partners did not accept the terms and revenue sharing agreements related to the new service, then they would have their videos blocked or the potential suspension of their accounts.

Offline viewing may sound like a dream to subscribers, but it raises concerns for content owners. Consider the potential risks of content being accidentally or deliberately misused by YouTube Red subscribers.

o If a content owner does not make timely use of Content ID (the use of digital fingerprinting to match officially uploaded reference files to user uploaded content), will clips be saved for download to be watched by users before legitimate claims are made?

o If a copyrighted TV show is posted to YouTube and then downloaded for viewing, could other viewers download the content to their mobile device and re-upload to another site that will not remove content?

YouTube says that if a video is downloaded for offline viewing that later receives a copyright claim on YouTube, that the moment the device the video was downloaded to is reconnected and back online,  the video will be removed from the device.

Content owners need to make sure that they have an effective monitoring and enforcement strategy using fingerprinting and Content ID.

Although there are some questions around content protection, there is also an upside for the content owners. There is potential revenue for YouTube, and also those partners that sign up for revenue sharing with YouTube. YouTube have stated they will pay 55% of the total net revenues recognized by YouTube from subscription fees that are attributable to the monthly views or watch time of a partner’s content. This is measured as a percentage of the monthly views or watch time of all or a subset of participating content in the relevant subscription offering.

It will be interesting to see how YouTube Red develops over the next few months. We’ll be watching with interest to see how many subscribers sign up.