YouTube Wants You To Pay So It Can Have More Of Everything
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YouTube finally announced this week that it would allow channels to charge monthly fees to access content on YouTube. Some have predicted that YouTube’s subscription model would undercut its ad model in an echo of the infamous paywall problem that has bedeviled online newspapers as they shifted from ad-supported to paid. Others have suggested this shows that YouTube is up against an advertising wall of their own making — advertisers will only pay so much to advertise against this amateur and semi-pro content. Still others gleefully wait to watch as YouTube learns how hard it is to get people to pay for things online.
In fact, all three of these things are minor asides in YouTube’s decision-making, as I see it. Instead of reacting to these and other constraints, YouTube is acting on an imminent opportunity: making a grab for more of everything that matters:
More business model options. TV is both ad supported and subscription supported and that works just fine. It gives people like HBO the creative flexibility to generate content advertisers may not be ready for and it gives companies like Scripps the freedom to promise more home-focused entertainment that home-focused advertisers care about. That flexibility is crucial to the ongoing success of those companies and it will be crucial to YouTube as well. Although in YouTube’s, case, I would be surprised if the revenue balance in the 1- to 2-year time-frame exceeded 10% or 15% subscription to advertising.
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