Two cents blog

It’s the end of YouTube as we know it

by Sam Kane on 23 October 2015

Ahh, YouTube. That brilliant procrastinating tool that we’ve all grown to love… even depend on. I wouldn’t say I spend a lot of time on YouTube, but I can get trapped in the vicious cycle of suggested videos. I came here to watch one music video and now I’m learning how to knit a jumper…

But you know what I love about YouTube? It’s free. I like free things, and I like that YouTube falls into this category. Now, with the launch of YouTube Red, I’m sad to say that YouTube is no longer a free service, but a subscription service. I’ll give you a moment to digest that.

From October 28, for US$10 a month, users in the US only (no word on when this will be available in Australia yet) can access YouTube Red – a service that removes ads, allows you to save videos offline, and allows you to listen to a video while you’re using another app. These last two points are great perks, but surely not worth $10 a month. So I suppose the question becomes, what is the price of ad avoidance?

For some, (myself included), $10 a month is too high. For others, this is a price they’re willing to pay if it means they don’t have to sit through a 30 second video before they get to watch the two minute video that they originally clicked on. But it’s always dangerous to ask consumers to pay for something that they once got for free.

This two tiered system has been compared to Spotify, which gives users the choice between a free service supported by ads, and a subscription service that is ad free. Despite the fact that this is not a new predicament for consumers, YouTube is experiencing some serious backlash over their new announcement. An online petition titled Stop YouTube Red has clocked up over 6,000 signatures so far. Even some of YouTube’s very own stars are voicing their despair:


In the face of all of this backlash, YouTube is working to reassure its audience that 99% of content will remain free. Which begs the question: what constitutes that 1%?

For content creators, they will be required to sign a YouTube Red contract, which means they will produce exclusive content for the service and will get a cut of the revenue from subscriptions. If they don’t sign the contract, their videos will be marked ‘private’; meaning nobody can see them. The King of YouTube, PewDiePie, is already said to have signed on for the service, with other big names sure to follow.

For users, it’s a question of whether they’re willing to pay $10 a month for exclusive content and no ads. If they are, this spells bad news for advertisers. Before YouTube Red, advertisers just had to worry about consumers skipping their ads after the first five seconds, now they have to deal with them not being seen at all. This presents a major challenge for advertisers, and one that is becoming increasingly common with the rise of multi-screening and the advent of recent ad-blocking technology.

It may be the end of YouTube as we know it, but is it the end of advertising as we know it? Only time will tell.

YouTube’s new subscription service YouTube Red launches in the US on October 28.


Sam Kane is a Media Coordinator at BCM

- Kev on October 23

Thanks Sam. Really informative. Will be interesting to see how this develops. The fact that videos can be watched off line is pretty good. It will be interesting to see how they might in the future share revenue with content creators as the quality and exclusivity of content will determine success.

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