YouTube Shoots Self In Foot!


Although rumours emerged just last week, it appears that YouTube has wasted no time whatsoever announcing that they are creating paid subscription channels for the site. For the low low price of 99¢ per month (or higher) you can subscribe and presumably be the first to see new content by the requisite creators.

How Do They Shoot Themselves In The Foot Then?

Well, that should be an obvious one, shouldn’t it? YouTube’s bread and butter has been videos that are free. Imprisoning them behind a paywall essentially makes them no different to plenty of other services out there such as cable or Netflix. Why would you give money to YouTube when you can give it to those instead? This is especially so when you are either a) already paying for them and b) they offer all your favourites rather than just ‘new stuff’.

The Fallacy of ‘New Content’ on YouTube

Naturally, the argument goes that you’re paying for the latest and greatest content. A fine point of view except that said content is also competing with everyone else that’s giving it away for free, on the same bloody site no less!

The sad truth that many people have yet to accept is that given the choice between paying for new content and searching for older content that’s free; the latter will win out 90% of the time. Netflix has built their customer base through offering older content, not through the likes of original content like House of Cards. The only reason they did begin producing new stuff is because they reached the natural limit with existing content, leaving the only way to expand though original material.

YouTube has no such limit, users already upload hours of new content every second and show no sign of slowing down. The site has also been massively profitable for YouTube for many years (although exact figures are hard to come by). Besides, how much revenue can Google even hope to reap from offering these paid channels? Even with a million subscribers, you’re talking a few million dollars a year; a pittance compared to the billions that ads bring in.

So What Is The Point

Well, that’s a hard one to nail down. Google clearly doesn’t really need the money, and it’s already failed twice in the past in getting consumers to pay for videos, so what does that leave? Why legacy players of course!

Yes, existing media companies are the ones who are apparently excited about this development (if judging by this list is anything to go by). There’s the Jim Henson company in there as well as, disappointingly, Sesame Workshop. In an ironic twist, animation seems to be over represented on the list of creators looking for the lazy way to make money. Long story short, many established creators have indicated to Google that they would engage more with the site only if there was some sort of paid subscription model.

All in all, the gist is to get people to cough up for something they can get for free somewhere else; a decision that has been, and still is, an unwise choice.

The Alternative for Animation

Do alternatives even exist? Sure they do! Beside the many different ways that creators can make money from their content, David OReilly suggests another one, Vimeo’s tip jar.

He raises a good point. Viewers are not averse to paying for content, just being forced to do so. Plenty of animators have found new and innovative ways to make money, be it from selling T-shirts, selling commissions, making personal appearances and what not.

For independents and small studios, it’s important to remember that subscription models only work well when the audience is extremely large. Otherwise, they act as a barrier to spreading your brand and audience.

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