YouTube Red has caused quite a stir among users and broadcasters, but are we responsible for its creation?
YouTube is one of the most popular and visited sites online, and it the undisputed king of streaming video content. It's a site that has something for everyone, and it's also a legitimate business for many YouTube stars, who make a decent living creating video content. Some famous stars, such as video game player PewDiePie, have become millionaires thanks to the massive popularity of the site, but huge attraction to the Internet-using masses.
A major contributing factor to YouTube's success is that it's always been a totally free site. All of its video content has always been offered openly, and available to all. All users need to do is visit the site, find a channel they like the look of and watch. Simple.
As such, YouTube broadcasters create content for this model, and money is made for both YouTube and the broadcaster via advertising. These ads play before and during videos, with the number of views determining the revenue the creator gets when the revenue is split between YouTube and the creator. It's a deal that's worked for years, but it's about to change with the arrival of YouTube Red.
Bringing Home The Bacon
Before we focus on YouTube Red, it's important to know exactly how money is made via YouTube, so let's dig a little deeper. YouTube, as everyone probably knows, is owned by Google and, as Google runs a business, it wants this part of its empire to make money. This money is made, as we've said, by adverts, and revenue is split between all parties concerned.
There's a basic 55/45% split of income, with the creator getting the lion's share, but there's more to this behind the scenes. YouTube content creators usually get around 55% of the cut, and this comes from ads and views as well as sponsored videos. Money generated by views is paid out per 1,000 views. A single view isn't simply a click on the video, and a viewer has to watch the video for long enough for it to count as an actual view according to Google's analytics. For every 1,000-2,000 views a video gets around $1.50-2.00.
The actual view count is a little complex. Prior to 300 views, visits are not verified. However, to prevent fraudulent view-bumps and other illegitimate figure-boosting, after 300 views visits have to be verified, which has been known to cause videos to be stuck at 301 views for a time. The verification includes a look at view length, to prevent one or two second visits counting as a view. It's also a method to discourage 'clickbait', where creator will use misleading thumbnails to bolster visits. So, videos need to be viewed for longer, a time limit YouTube keeps very vague to prevent misuse.
Sponsored videos make a more guaranteed figure, as a sponsor will pay an agreed amount for the deal, as well as any other arrangements, such as paying more for certain numbers of views. The only downside is that YouTubers need to explicitly put sponsor messages in their videos, often presented by themselves. It can feel like a bit of a sell out, but it makes money - and that's what needs to be done to put food on the table. Then, there's Patreon.
Crowdfunded Entertainment
A relatively new method of income for YouTubers is Patreon. This is a system that allows YouTube content creators to receive donations from viewers in exchange for privileged content and rewards. This is a separate income stream and is becoming very popular with YouTube stars, and more are using this every day. Not to be confused with other crowdfunding sites - like Kickstarter - that fund specific one-off projects, Patreon is designed as an ongoing method of generating income.
Patreon only takes 10% of the donations, leaving the creator with 90% of the revenue. This has obvious benefits, and it also brings the YouTube personality closer to their audience, establishing a very real fan base and community, who are willing to support the channel in question. Views can get extra videos, the ability to communicate directly with the creator and other benefits such as no ads.
Patreon has proven to be so successful that many YouTube stars now make more money from it than through YouTube itself. YouTube income is still very important, however, especially for larger channels that don't use the Patreon platform. These channels still rely heavily on advertisements, which is where the trouble begins.
AdBlocked
Few people like adverts, and aside from the companies or individuals making money from them, most would like to see them gone. This applies to TV, radio and streaming services like YouTube. If you want to watch your favourite channels, you'll likely not want to sit through adverts to get to them, or have your program split into small chunks, ruining the entertainment.
It's a problem, and one that's led to a solution: AdBlock, a browser plug-in that attempts to completely blocks all adverts on any site. This includes YouTube, where it can erase any and all adverts from videos, including the ones that play before a video, ones that play during, and other ads such as banners and pop-ups. It simply strips all of this out, so your videos load up and play instantly without interruption. For viewers who want a life free from adverts, this is a very good thing. For YouTube content creators, however, it is not.
YouTubers make a good deal of their income from adverts, and if these adverts are not seen, none of this income is made. So, from a certain point of view, when users make use of AdBlock, they take money away from the YouTube channel they're watching. It isn't hard to see why this has caused such debate; although no one can really blame people for using AdBlock, it is damaging to YouTubers who rely on those ads to pay the bills. It brings in a whole question of the morality of using AdBlock and whether or not your should.
Whatever your opinion of this is, though, there's little chance of the majority of AdBlock users changing their minds and removing the software any time soon. This thought hasn't escaped the minds at Google and YouTube, either, which have taken steps to combat this drop in revenue - at last report, Google just about breaks even on YouTube - by coming up with the concept of YouTube Red.
Red Alert
Now available in the US, YouTube Red is a subscription-based version of the streaming service. It costs $10 per month to access it, and for that $10 you get a version of YouTube with no adverts. 'Yeah, but you can get no adverts with AdBlock!' You may exclaim. This is true, but there's more to YouTube Red than ad-free viewing. You also get access to Google Music (with a sub to Google Music also granting access to YouTube Red), as well as exclusive content only for YouTube Red subscribers, coming in early 2016.
This exclusive content comes from YouTubers who sign a deal with Google to produce content for the new premier service. The most notable example of this so far is the world's most successful YouTuber, PewDiePie, who is creating exclusive content for YouTube Red. A new show. Scare PewDiePie will put Felix Kjellberg into situations inspired by video games.
Other known exclusive shows include Sing It, an X-Factor style show be the creators of the Kids React To... series of video and A Trip to Unicom Island, which follow IlSuperwomanll (Lilly Singh) on a world tour.
Obviously, the value you place on YouTube Red will depend upon your appreciation of these YouTube personalities, but more content will no doubt flood onto the site in future, with more channels signing up. Also, along with these major features, YouTube Red includes some other extras, including enhanced support for mobile devices, Apple TV, games consoles. Smart TVs and (perhaps the most interesting feature - even more so that the exclusive content) the built-in ability to save and view videos offline.
Shows can be downloaded for up to 30 days and can be watched locally without an Internet connection. This is a legitimately useful feature and one that really should be in the standard version. Mobile users can also run videos in the background, so can listen to music or podcasts, for example, while doing other things.
Is this extra content enough to justify a monthly subscription? As with all things like this, only time will tell. At the moment, we'd say no, not really. As end users, there's simply not enough here to warrant interest. Some neat extra features and very specific extra content isn't a selling point, but Google has promised much more. The issue of attraction for YouTube users isn't the major problem at the moment, though.
Seeing Red
We know how YouTube users earn money. We know that plug-ins like AdBlock take money away from both YouTubers and Google, and we now know what Google plans to do about it, in the form of YouTube Red. We also know that the benefits of YouTube Red aren't all that great out of the gate. Regardless of your stance on this, though, and whether you agree or not, it's clear to see why Google has taken these steps.
The music, movie and games industries have all taken steps to prevent piracy and loss of revenue. Although using AdBlock doesn't constitute piracy, it does mean a loss of revenue, so from a business standpoint, something needed to be done. The problem here is the divisive method Google has used, and even within the YouTube content creator community, YouTube Red isn't a clear cut thing. Some welcome the move, while others loathe it and predict the end of YouTube as we know it.
There's been quite the uprising within the YouTube community, with even big names that have thousands, and even a million subs criticising Google's move. A lot of this stemmed from a general misunderstanding, and even now at the time of writing, the exact nature of the changes YouTube Red will make and what it means for established YouTubers isn't clear.
Google has said that YouTube Red will be a good thing for content creators and that it'll offer extra income streams alongside existing content. However, some have said that the way the pay checks will be distributed will be unfair, especially with the planned 'revenue sharing' model, which some fear will take money away from channels and pay it out elsewhere. This will apparently divide revenue based on overall view time, then divvy it out to creators. Others are worried that videos may be tagged as private by Google, made unavailable to normal YouTube viewers.
A very common worry is the 99% issue. Basically, many see only the bigger and richer YouTube channels making any money from this service, while the remaining 99% are left out. The Rich get richer and so on. As YouTube Red seems to be focusing on the like of PewDiePie and other major channels, it's easy to understand this fear, and if revenue is going to be paid out based on view time, how will smaller channels get a look in?
Red Dawn
As YouTube Red has only just launched (again, at the time of writing) it's a little too early to tell what the long term effects of YouTube Red will be and how smaller channels will fare. However, as YouTube has always been focused on free, ad-based content, the announcement of a subscription service was always going to generate uncertainty, both among viewers and content creators. One thing is for sure, however, AdBlock has had a definite impact on this whole situation. This begs the question, is it right to use AdBlock?
This is an odd one really, as there's really only one answer and that's no. Sorry, but it's the truth. AdBlock is designed to block ads, which means channels don't get ad revenue. This directly impacts a content creator, and instead of getting revenue for every view of their video, they instead only get a fraction of it, from users who don't use AdBlock. This can lead to a drastic loss of income, and this impacts everything in a YouTuber's life. Remember, the majority of YouTubers are just people sat at home making videos. They're not big companies who can easily absorb a little loss. All income lost here affects real lives, even to the point of paying the rent.
At the same time, though, it's hard to argue against using AdBlock from a user point of view, as it allows the viewing of YouTube content instantly, with no interruptions. If you watch YouTube everyday and spend a good deal of time online, you'll undoubtedly want to do so without a huge amount of adverts. It's one of the reasons people prefer it over TV these days, and as we stated earlier, no one likes adverts, especially when you've seen the same ad a million times already.
As PewDiePie argued when defending YouTube Red, AdBlock has had consequences. Alongside the constant problems faced by content creators, it's now led to YouTube Red, which directly affects the end user. So, all that time spent enjoying AdBlocked, ad-free content is now in question. If AdBlock had never been used, or at least to the extent it had, maybe YouTube Red would never have existed. Maybe.
Google has said YouTube will continue to support free, ad-based content, but there's no ignoring YouTube Red. At the end of the day it's another income stream for Google and one that gives it a guaranteed amount of revenue, regardless of views or site visits. Once a subscription is paid, the income is there. Because of this and the potential for even more money, Google will push the service. It's always pushed its many services, even ones that have been hated by users. Just look at Google Plus. A cynical person could deduce YouTube Red was always on the cards, AdBlock or no AdBlock, but whatever the case, Google's remedy is anything but simple and certainly anything but universally welcome.
When YouTube Red matures and more importantly, when it's available internationally, we'll really begin to see the impact it has on YouTubers and viewers. For now, it's an optional service that's the result of viewer habits, so it'll be interesting how well this impact on the streaming site will change and how it affects AdBlock use. The eyes of the Internet-using world are focused on Google, awaiting results.
Why?
YouTube Red may seem like a very strange step to some. It's a very complex, and large-scale effort to fix what is essentially a single problem, and that's AdBlock. So, a very understandable question many have is, why do this? Why not simply block the blocker, and develop a way to stop AdBlock?
The answer is simple really. Any potential software-based prevention will always be circumvented. It doesn't really matter how much money or expertise is pumped into them, software solutions always fail. Just look at the masses of expensive and ingenious methods software companies have employed in the form of copy protection and DRM. Some of these methods have been so extreme, they've stopped products from working at all.
Regardless, DRM and copy protection is always broken, usually within hours, and the pirates always emerge victorious. Likewise, secure computer systems are always cracked by hackers, there's just no such thing as totally secure, and we're even talking about top secret government departments and banks here.
YouTube is simply a collection of public videos, not a military secret, so it would take very little effort for hackers and plug-in creators to bypass any such methods Google could employ. AdBlock may be down for a while, but it would be back time and time again. For this reason, an exclusive, subscription-based method is best, and it has the added bonus of extra income. Google has much more control over this, and although exclusive videos will surely leak online anyway, Google has the money in hand, so business damage is done. Sadly, the same can't be said about content creators, even ones that are a part of YouTube. If a video is pirated, and leaked online, creators won't get any money for views at all. Even this method is far from perfect.
Patreon RIP?
An widely held online opinion tells us that YouTube Red could lead to problems for Patreon, and channels that use it to boost their income. If viewers have to pay for YouTube Red, why would they want to pay again - let alone send money to one, single site? After all, YouTube Red eliminates adverts, so the major benefit is already paid for.
This is a little misguided, however. Although YouTube Red incurs another cost, it's only for channels and content specific to that service. Yes, there are no ads, but other rewards are limited. Most people who donate to channels via Patreon are fans of specific channels, so the benefits they get are unlikely to change. If a channel using Patreon moves to YouTube Red, this may change things, but any self-respecting YouTuber will be upfront with their audience, and address this.
For channels than don't take up Google's new service, Patreon will still be a perfectly viable, and welcome solution. What's more, it's one that isn't forced upon viewers, and yet gives fans the chance to support their favourite online personalities.
Also, Patreon donations go to the content creator, and no one else (after Patreon takes its 10%). YouTube Red revenue could be split between Google and various creators using the revenue-sharing system, so it's not even clear how much channels will get. This means, at the moment, Patreon is still the better option, and will likely remain so.