Macey Wolfe
Reuter
Economics B2
27 March 2017
The Truth About YouTube Red
As the third most visited website in the world, YouTube sees over 30 million viewers who watch nearly five billion videos per day (Donchev). In October 2015, Google, the owner of YouTube, launched YouTube Red, an upgraded paid subscription based version of YouTube.
The YouTube Red subscription service is $9.99 per month for no advertisements, exclusive content, the ability to listen to videos without being in the app and the ability to download videos to view offline (Ingraham). Despite these benefits, YouTube Red is overall not worth it for creators or consumers.
YouTube has claimed this option will essentially give more profits to the creators (Spangler). However, creators can more easily turn profits using sponsorships, advertisements or Patreon, a website which allows subscribers to donate money to creators to make content (Dennis). Thus, money isn’t a large incentive for having YouTube Red content.
Some YouTube Red content is later released. Creators recognize withholding content will decrease their content demand, as viewers can find substitutes that are available for free on regular YouTube. The reason why YouTube is able reach billions of people is because the website is free (Stelter). Therefore, the YouTube Red subscription to gain access to special content may drive viewers away, which is bad news for creators who need viewers to make money. Consequently, YouTube Red is not beneficial for creators.
For most consumers, the marginal benefit of having no ads, special content and downloaded videos does not outweigh the marginal cost because the cost is so high (Dennis). Since some YouTube Red content is released later, consumers will eventually be able to get the “exclusive” content (Dennis). Furthermore, the other “benefits” of YouTube aren’t particularly unique. People are still able to listen music or watch videos via other platforms such as Spotify or Netflix. In conclusion, YouTube Red is not worth it for consumers.
Dennis, Riley J. “4 Reasons Why YouTube Red is Bad for the YouTube Community.” MUO. MakeUseOf, 26 Oct. 2015, http://www.makeuseof.com/tag/4-reasons-youtube-red-bad-youtube-community/
Donchev, Donny. “36 Mind Blowing YouTube Facts, Figures and Statistics - 2017.” Fortunelords. Fortunelords.com, 23 Mar. 2017, https://fortunelords.com/youtube-statistics/.
Ingraham, Nathan. “YouTube Red is Google’s Ad-free Subscription Video Service.” Endgadget, Aol Inc., 21 Oct. 2015, https://www.engadget.com/2015/10/21/youtube-red-google-ad-free-video-subscription/
Spangler, Todd. “YouTube Red Launches: Is It Really Worth $10 Per Month?.” Variety. Variety Media LLC, 28 Oct. 2015, http://variety.com/2015/digital/news/youtube-red-launches-10-per-month-1201629071/
Stelter, Brian. “YouTube launching ad-free $10-a-month Subscription Service.” CNN Media. Cable News Network, 21 Oct. 2015, http://money.cnn.com/2015/10/21/media/youtube-subscriptions/.
Good article I liked how you actually cited your sources in the text. I would have liked to maybe see the demand curve graph of the consumers that have payed for YouTube red. I think it's similar to Netflix on how there is a monthly fee and people pay for Netflix so I don't see why consumers wouldn't pay for YouTube red.
ReplyDeleteI would have to agree with the idea that the benefits of getting youtube red do not outweigh the costs. For just 50 cents more a month you can get a spotify premium account which has access to more songs than the songs that are released to youtube, since only the most popular songs of an artist are generally posted, and you can listen to the music while not on the actual app. Youtube has always been the same since it was created and no one is going to want to change how it is made now.
ReplyDeleteI agree with you that YouTube Red does not sound worth it. Many people already use ad-blocker or click the "skip ad" button, so the ad-free content doesn't benefit users as much as the company seems to be claiming. Plus, you can already listen to videos on your phone without being in the app, so that isn't new either. The only thing that would reel in customers is the content. Except for $9.99 a month, that's $2 more than Netflix charges, and Netflix has significantly larger range and quantity in content. Plus, it contains arguably better content, especially since there isn't only original content like YouTube Red. Overall, I totally agree with you that the marginal benefits don't outweigh the marginal costs.
ReplyDeleteEven so, the idea of being able to close out of the app is a good idea, however, the way youtube red was created causes problems for both creators and viewers. So just allowing people in-app purchase would be a far better idea than youtube red.
ReplyDeleteDue to allowing in-app purchases, profit increases and a lot of people would be far more willing to pay in-app purchases.
This topic actually really interested me as I watch different YouTubers often. Even though I had heard of YouTube Red, I wasn't aware of all the benefits it provided to a consumer. YouTube for a lot of YouTubers is their main source of income, by getting rid of advertisements, the view count for the YouTubers Ads go down, and so does their revenue. I don't believe that the consumers paying the $9.99 a month make up enough profit in order for the YouTubers to make enough compensation for the lost ad views, and that it is just another way for google to make more money. In the long run I am really hoping it doesn't affect the content that any YouTubers are currently uploading.
ReplyDeleteI agree that the opportunity cost of YouTube Red does outweigh the benefit. Although, I did enjoy YouTube Red when I had the FREE trial, I could not see myself purchasing this each month. I am always able to find videos that keep me entertained without paying the extra fee. I also agree with you that it does hurt the creators more than it helps them because it drives some consumers away.
ReplyDeleteWith your statement about YouTube Red not being beneficial for the consumers or creators taken into mind, I completely agree with you. There are plenty other alternatives mostly because YouTube is used to listen to music. Netflix and YouTube have to completely different uses as well. One is meant for watching a variety of different movies and TV shows while YouTube is used for, music or educational, or even entertainment purposes. The choice of whether someone will spend their money on, Netflix or YouTube Red is more of a personal preference, so it more or less depends on the person.
ReplyDeleteI think you brought up a great argument, and mainly because you shifted a lot of the conversation to the point of creators rather than just the consumers. The ad money is a big part in keeping youtubers in the business of constantly creating new content. I have to say that there are some positives to youtube red though, the main one being that you can listen to almost any song on youtube without using data on your phone or other devise. But I understand how this feature does give youtube some money but they also loss a lot because they are decreasing their profits from ad campaigners. Overall I think you did a great job and I liked the different perspectives
ReplyDeleteI have never really understood the whole purpose of YouTube Red, and the explanation of it in your article really helped. It even helped me decide that, yes, YouTube Red still doesn’t really have a good purpose. I think that the only reason Google decided to create it was because of how impatient we are getting now-a-days. People can’t wait just 20 seconds to skip an ad so they pay almost $10 to do so. To me, it just feels like people are throwing their money away. The benefits of the video should outweigh the cost of watching the ad. I feel like it is worth it to watch that 20 second ad to be able to watch your 20 minute video for free.
ReplyDeleteThere are some interesting things included in YouTube Red, like being able to close out of the app and still have your videos playing, but that really is the only thing. Do you really want to pay $10 a month just to close out of an app and still have your music playing? Just buy the song on iTunes! It will be cheaper in the long run!
As someone who has considered buying YouTube Red, I have to agree that purchasing it is a waste of time. All the points that you stated are completely factual, there are easy substitutes for every YouTube Red video, and not only that; there are hundreds upon thousands of other videos on the website alone. Having to pay for exclusive videos on the website is like paying for a tanning booth over the summer when you can just go outside. I feel as though in order for YouTube to make their idea significant, they would have to charge for use of the whole site. While this would be terrible for us, their $9.99 a month isn't really worth it in the long run.
ReplyDeleteWhile there are some nice features of this subscription, the benefits do not seem to outweigh the negatives. In my opinion, you are just paying for content that should be free on the site. And as far as the ads go, while they may be annoying, many people use add blocker, so that would not be an issue.
ReplyDeleteI've never even heard of youtube red, so I'm assuming not many people use it. It does have benefits, but I don't think it's worth paying $10 per month. There are many other apps that allow you to do the same thing and are free. I agree that youtube red is not worth it for consumers.
ReplyDeleteI don't think the cost is too bad because the features of Youtube Red are worth it to me. Everyone can agree that when an add plays during the middle of a video it's frustrating, so paying $10.00 a month for Youtube Red would make the Youtube experience better. I agree with what you said about the consumer demand of youtube content; If the consumers know that the currently exclusive content on youtube red will eventually be on regular youtube, they are going to be less likely to subscribe. I think you could have compared youtube red to Apple Music or Spotify Premium to compare and contrast the competition.
ReplyDeleteI had never even heard of YouTube Red prior to reading this blog. At first the idea of not needing the app open to listen to the content seems like the start of a great idea; however, that is pretty much the only benefit that I would care about. I would not pay $9.99 a month for one feature. On top of it already seeming to be a bad idea for the consumer, it seems as if YouTube would be losing money as the blog mentioned most of the revenue comes from advertising.
ReplyDeleteThis is interesting because I did not know YouTube Red even existed. Based on your post and my own opinions, I personally would not purchase this. It would be cool to see data on how many subscribers this website has. Consumers really just have to weigh the opportunity cost of seeing the ads and exclusive content, versus paying the monthly fee. If people are not purchasing this product, the creators will have to determine when they should shut down because it becomes unprofitable.
ReplyDeleteI agree with you saying that You Tube Red is not worth it for viewers or consumers. I don't frequently use You Tube but when I do I want it to be free. I probably will never use You Tube Red just because it isn't free. I think that the creators are just making it harder for themselves to make money and also driving customers away.
ReplyDeleteAlthough you have to respect youtubes push for extra profits, watching a 15 second ad doesn't really matter. The cost of paying to avoid ads is far less valuable then just simply waiting. And although there may be exclusive content, there are millions of other videos to keep you entertained.
ReplyDeleteI am not a huge t.v watcher, but I do find myself watching YouTube videos throughout my day. Videos on the sight have educational purposes and some for just pure entertainment reasons. Having to pay extra money to get exclusive content or being able to listen to my videos while my phone is locked, isn't that important to me. I find that if I want to actually watch a video, I am going to sit down and enjoy it rather than be up and about doing other distracting things. So one of the supposed "benefits" of YouTube Red doesn't even apply to me which is why I will not be purchasing it.
ReplyDeleteI don't agree with the concept of Youtube Red either. They do remove advertisements, but typically when loading a video an advertisement will go 5 seconds and quickly allow you to skip. Is that really worth $10 a month? I know that they also release exclusive content for those who have the subscription, but I believe that there is already enough entertainment on the website to enjoy without having to buy into that. I also think removing the advertisements is a significant loss for the youtubers who earn their funds from ads and sponsorship. If you are to remove those before their videos they could be seeing a large dip in the revenue that they typically produced. Overall I believe Youtube Red is a bad idea and not worth the investment
ReplyDeleteI agree that for many YouTube watchers, paying an extra $10/month is not worth it if there are only a limited number of benefits. However, I compare this to Spotify Premium (which I believe is $11/month or something like that) and it seems like that has been relatively popular even though it has many similar benefits as Youtube Red. The difference is, Youtube was late to the game and now has to compete with the benefits of Spotify Premium and Netlix. I would suggest that they lower their price to $7/month so that they will attract Netflix and Spotify users to their own service.
ReplyDeleteYoutube Red like every other media outlet out there has its flaws and isn't for everyone, but unless you are high strung with ads playing between things then it is the thing for you. Personally I wouldn't spend $10 a month on something because it doesn't effect me as a listener or viewer, But when it comes to places like restaurants and stores that play music constantly throughout the day they don't want ads playing between songs. That's why there are choices like Pandora plus and youtube red out there for the people that don't want the ads. But as a person when the price is free it's worth it to have to deal with the ads because that means more money is in my pocket.
ReplyDeleteI am on YouTube daily. I love listening to music and watching funny videos. I think paying ten dollars a months for no ads is ridiculous. The ads on YouTube can be skipped after five seconds and, if you can't skip they are only about ten seconds long, waiting that time won't kill you. The ten dollars a month could go to something more meaningful and more needed in my opinion.
ReplyDeleteI have to agree with your conclusion that Youtube Red is not a worthwhile service. Like many of us, I use Youtube on a regular basis, and value the website due to its free content. When you start getting forced to pay for that free content, it makes the website seem more like a greedy corporation than the fun and open video platform it should be. Furthermore, though the creators of Youtube Red say that the content on this new website is more expensive to make, the argument can be made that this content is not nearly as good as the content provided by other subscription-based services. If I wanted to pay to watch videos, I would undoubtedly turn to subscription-services that provided better, more professional content like Netflix or Hulu Plus rather than the same glorified content you can find throughout Youtube.
ReplyDeleteMost apps used for listening to music have an option where you can pay a certain amount of money each month to get a better and no advertisement version of the site. Although I do pay for one each month i feel like its dumb and a waste of money. Honestly, is it that bad if your phone has to sit on the Youtube screen or you have to listen to advertisements? No its not, we just choose to spend our money on dumb things. Most of the sites cost around $9-$10. Although this may not seem like much money, it for a music app.
ReplyDeletePrior to this blog post I have never heard of YouTube Red. From the information that you provided I would have to agree with you and say that the price upgrade is not worth it for consumers. One YouTube Red advantage is that it is advertisement free. However, unlike some music applications that demand you to listen to the whole 30 second advertisement YouTube allows you to skip ads after 3-5 seconds making the upgrade less needed/appealing. Personally I would not buy this upgrade because the marginal cost of paying $10 outweighs the benefits that it provides.
ReplyDeleteI agree with the fact that this is not beneficial for the creators. All companies want to make more money and this was the way YouTube had thought they would gain extra profit, even though they found out that the marginal benefit didn't out weigh the marginal cost. Creating this would definitely decrease the profits this company earns because there are a lot of people who wouldn't want to pay $9.99 to watch any video without any ads. It shouldn't matter to watch a 15 second video anyway, I rather watch a 15 second video than pay $9.99 a month to get rid of it because I could spend $9.99 on something else other than paying for no ads when I want to watch a video. Plus there are a lot of other videos on the internet to keep people entertained. Consumers or the viewers will find somewhere else to watch the videos they want and a lot of viewers YouTube has will be gone and YouTube may become unprofitable and decrease significantly in revenue.
ReplyDeleteI liked this topic simply because I have been thinking about purchasing a subscription. The market of customers for this service is so vast and it could really make some potential profit. For me this is a solid service provided by YouTube because I enjoy listening to recorded live music. I think it can be used for multiple other things and that this is a big money maker for YouTube.
ReplyDeleteI would for sure agree with you. YouTube Red absolutely does not seem worth the money it costs for it. YouTube by itself is already a free site. Sure, the ads can be annoying and watching videos offline would be cool, but paying $9.99 just for these extra features seems a little crazy to me. It's almost as if YouTube is trying to become its own streaming service like Netflix and Hulu. I know some creators on there have original series they're trying to promote, but I don't see why they couldn't just do that on their own channels. Making their fan base pay for an already free streaming service in general for extra things is unfair to me.
ReplyDeleteI think you've stated some really solid points your article. I think that in the end of the day, YouTube Red is not worth it. On a side note, YouTube as a whole used to be completely ad free. So now charging user, such as a long term user as myself since I've been using it once it first got popular seems like a total scam. There are other free substitutes to red such as Ad block, and youtube to mp4 converters that will let you download any video for free. No YouTube Red required. I think YouTube Red needs some serious revamping if they are to see my money anytime soon.
ReplyDeleteI do agree with not paying $9.99 a month for no ads on YouTube because I can spend my money on better things, but I wished that YouTube would take to account that most subscriptions cost $5.00 so why not go on theirs instead. But I do get that YouTube is a big website and I do go on YouTube almost everyday and my primary entertainment along with Netflix.
ReplyDeleteWhile YouTube Red doesn't seem like it's worth it for the consumer, I disagree with the notion that it isn't worth it for content creators. Even if creators do make more money from sponsorships or campaigns through third parties such as Patreon, YouTube Red offers the creator another platform to generate revenue. In other words, the creator need only spend more time producing content in order to benefit from YouTube Red. For creators with extra time on their hands, this is extremely beneficial. On top of this, to be a part of YouTube Red you have to be a big-name YouTuber, so YouTube Red offers these already big names a way for them to create content which is seen as much more professional than what they create on the subscriptionless YouTube platform.
ReplyDeleteWhen you compare the cost of Youtube Red to other app subscriptions and services, it is actually relatively similar. A good example of this is Spotify, which allows you (for a steep $10 a month) to stream music without interruptions of ads, great sound quality, and the ability to play any song you like, whenever. Both Red and Spotify gained their popularity as said because they are free, but both companies offer incentive to purchasing their upgraded service. Now in comparison it can be said that a majority of people would spend the money on Spotify, and this remains relatively true, as Spotify Premium is a much more popular choice. Most people can install apps like ad blocker that take out the ads in youtube, solving the negative of not having Red. Not to mention, it is ten dollars a month for a service that is relatively the same with minor changes. Yes, Spotify is the same cost, but it has better reasons for upgrading, and one that a majority of people find greater than Red. I agree that the overall the cost of YouTube's service is not worth it for consumers. There is other substitutes that far outweigh spending $120 a year on their service, when you can use other apps to control the negatives found in the free version of Youtube, such as mentioned, adblocker.
ReplyDeleteI agree that they do not need to have YouTube Red but it might help some consumers tastes. Overall YouTube Red could be the next big thing for all we know but if revenue is what they want this might help. Although the opportunity cost would be big because of the amount of spending they are doing on advertising, which could be going towards something else, like YouTube or Google. Overall YouTube Red might help them a little bit but it will not have enough consumer taste for them to keep up with it.
ReplyDeleteI agree that the reason to subscribe to YouTube Red is only a slight improvement for both viewers and YouTubers. This seems to be only beneficial to the company, and the demand isn't high because there are other distributors and ways to watch similar or the same content. The demand may increase in the future however, because they made a quick announcement some time ago that YouTube was going to stream tv shows and such similar to Netflix and it would make sense for this only to be accessible for the people who paid the subscription. Perhaps it's only at this time that YouTube Red is mostly just a better version, as they seem to be making plans for the future and it just needs to be expanded slowly through progression and willingness of consumers.
ReplyDeleteI agree that the $9.99 for YouTube Red is not worth it. The best comparison to a paid subscription like this is Netflix, which is cheaper and has a considerably wider range of content. While having no ads is a plus, it doesn't have much leverage towards consumers since ad blockers are so easily available to download. Of course, the opportunity cost of not purchasing YT Red is missing out on the exclusive original content from creators, but it's up to the consumer to decide if it is worth it to pay the 10 dollars every month. You are not necessarily guaranteed new content every month with YT Red, since the creators decide what and when to upload, so it is possible you may pay for a month without seeing anything new. On the other hand, Netflix adds new shows and movies throughout every month. Overall I don't think YouTube has done a very good job of making YT Red appealing to consumers.
ReplyDeleteI tried the trial of Youtube Red and enjoyed the benefits from it. It was great to be able to go out of app while the video continued and for it not to have to load again. Some of the content was entertaining. In addition, I enjoyed downloading music for free from saved videos. However, despite all these benefits, the $9.99 price tag isn't worth it. There is nowhere near the amount of content required to make it that much. Overall it was cool but they should just extend these features to everyone.
ReplyDeleteI agree that Youtube Red is not worth the price. The content it gives is just not enough when there are other services that provide it in a better way. The new content available to watch is unreliable and ads can easily be blocked by an ad blocker. Spotify which has the same option to block ads and allow for extra skips has seen more success, because of no adblockers. The main reason to get Youtube red seems to be for no ads and to play while the app is closed, but the videos that would be played while the app is closed are most likely songs which can be done with other apps in a better way already. As of now, the upgrade is not worth the price.
ReplyDeleteEven though Youtube red may seem like it is not worth it to most, for some it is. By removing advertisements and allowing people to download videos to watch at a later time, for those who are avid Youtube video watchers, this is worth the $9.99. Youtube can burn though data, as many of us know, so if this allows people to download the videos while in a wifi hotshot and not use data, the consumer could potentially be saving money. While I would not purchase this myself, I think that Youtube Red can be worth it to the right person.
ReplyDeleteI hadn't heard of YouTube Red before this, which is interesting because I would've expected more advertisements/promotions (likely before free, YouTube videos) promoting this upgrade. I would also be interested to see how many people choose to upgrade to this new platform and how this affects the revenue brought in for the corporation.
ReplyDeleteI've always seen the ads for YouTube Red and thought that it would be cool to be able to listen to music or videos outside of the app but that was the only part that seemed intriguing to me. Seeing now the features that the product really provides shows me that it's really a waste to purchase because YouTube provides better services than YouTube Red; why would I watch a video on YouTube Red that was produced months ago for $10 a month when I could be watching an updated video for free on YouTube? The opportunity cost of using my $10 a month for something better and for using the time I spend on YouTube Red doing something else, is much too great for me to believe that YouTube Red would ever be worth the purchase.
ReplyDeleteAs a Youtube binge watcher, I personally don't think its worth to spend $9.99 for Youtube Red because the opportunity cost of $10 can be used in somewhere else or at different streaming service. There are several services like Hulu, Amazon Prime and Netflix, embedded the features similar to the Youtube Red. YT could be new for consumers, but I am sure everyone would have realized that it is no different than other apps, except downloading videos to view offline. In fact, the free Youtube launched 'Smart offline' feature in India, where this feature requires a subscription to YoutubeRed in the United States. The marginal cost is much high for this feature because the same feature is used for free in another country. Therefore, Youtube Red is not worth to purchase, as people have better substitutes to fulfill their viewing.
ReplyDeleteI always wished that YouTube allowed us to listen to music outside of the app. This feature could possibly be a deciding factor for people to purchase YouTube red. However, in my opinion if I don't think that this feature is a deciding factor for me. Between YouTube and YouTube Red there are little differences between the two. The opportunity cost of spending $10 a month is not worth the little differences between YouTube and YouTube Red.
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