What YouTube Red Tells Us About Consumers

Last Wednesday, YouTube launched one of its most significant products to-date: YouTube Red, a new subscription service that allows subscribers to watch all the ad-free content they want, save videos offline, and gain access to music and exclusive video content – all for $9.99 per month. Perhaps one of the best features of YouTube Red is that mobile users can finally switch to other apps and continue to stream from YouTube. This move essentially opens up YouTube as a music streaming service.

Initial response to YouTube Red has been cold. The early critics are already crying out, "Why would I pay for something I already get for free?"

Of course, YouTube Red is offering more than the basic YouTube platform we already know (as outlined above). And, of course, critics are aware of the added features. However, the initial outcry suggests: maybe not every service is meant to operate on a freemium model.

Longtime YouTube/video creator Gary Vaynerchuk recently asked his followers if they would pay for his show. Nearly everyone responded, "no," even though many left guilt-ridden comments along the lines of this one:

"I thought seriously about your question and I do not think I would pay for the askgaryveeshow in its current form. I feel kind of ashamed for saying it so maybe it's one of those things where I am kidding myself, where if I didn't have Gary I would feel withdrawal and pay for it. But my heart and my gut would want more if I were to ever pay for what it is that you do."

This Facebook fan wasn't alone. Many responses echoed his sentiments. What Gary's experiment shows us is that we don't like to pay for the things we already have for free.

YouTube produces a lot of value for audiences, content producers, advertisers, and Google. Each of those four groups has the opportunity to create profit from the value YouTube offers. (Yes, even audiences can profit when they use ideas shared on YouTube to go out and produce their own business/art/content.)

However, it remains to be seen if the value-to-profit path will be paved with the freemium model. Rather, we may find that the traditional TrueView model offers the best value-to-profit path. Or, we may see that YouTube is nothing more than a foot in the door with an audience (for most brands). Regardless, this bold new step for YouTube is a significant milestone as brands, agencies, and content producers continue the transition to increased video content budgets. 

Or will it end up next to last year's YouTube Music in a pile of discarded Google products? What do you think?

This post originally appeared on the BuzzPlant blog

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Original source: What YouTube Red Tells Us About Consumers.
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