YouTube Red and the World of Online Advertising

By Greg Bortkiewicz, Landis Communications
In October, YouTube took steps to cement itself as a media juggernaut with the introduction of YouTube Red, a paid subscription service. For $9.99 per month, users receive a range of perks, including:

• Ad-free videos (more on this later…)
• Offline viewing
• Background play
• Free subscription to Google Play Music
• Original shows

 
At first glance, this seems to be fairly reasonable. Offline viewing is a great option for those who make long commutes (especially on BART, where cell signals can be unreliable), background play means you can listen to music while using other apps on your device, and the Google Play Music offering arguably makes this a better deal than rivals such as Spotify.
The introduction of original shows follows in the footsteps of video-streaming sites like Netflix, which has produced shows including House of Cards and Orange is the New Black to critical acclaim. YouTube will be pairing the existing stars of its network, including PewDiePie and the Fine Brothers, with television executives to create content exclusive to Red members.
I’m not an avid user of YouTube, but with Netflix starting at $7.99 per month and also being ad-free, the YouTube Red price seems a little high. Per Sjofors, CEO of the leading pricing research company, Atenga, agrees, suggesting that even $4.99 might be pushing it (see comments for his opinion).
But what really interests me is the offer of ad-free videos. I’m sure this will be a major incentive for people to sign up – after all, how frustrating is it to have to watch an advert before every video (especially if the video itself is really short)?! That said, will YouTube Red really be as ad-free as they are keen to promote?
First of all, it doesn’t apply to paid content on YouTube. This includes paid channels and TV/movie purchases and/or rentals. Secondly, native advertising and brand-sponsored content will still be present. While this may not be as pervasive as traditional adverts, they are adverts nonetheless – which calls into question YouTube Red’s claim of an ad-free platform.
Numerous popular YouTube channels and stars make use of brand advertising as a crucial part of their revenue. YouTube has already made attempts at clamping down on brand-sponsored videos, but it would be virtually impossible to prevent anyone from plugging a brand in their video, whether they outright mention the brand or use product placement.
So YouTube Red will be ad-free to an extent. Is it still worth the $9.99 monthly subscription fee?
I will confess that for some time now I’ve used an ad-blocking extension on my browser. I’m aware that many sites rely on advertising revenue as a major source of income, but I also feel like after years of annoying and garish adverts and pop-ups, no one can be blamed for using an ad blocker. Every now and again, my wife will show me a YouTube video on her laptop and it I’m reminded about how frustrating it is to have to sit through an advert first – even if it’s just a few seconds before you can skip it.
I believe that for many potential subscribers it will be a moral decision on whether they sign up. How does the desire to support websites and YouTube channels weigh up against paying the fee when there are free alternatives?
As I already mentioned, I’m not a frequent enough user of YouTube to consider becoming a member of Red, but I would love to hear the thoughts of people who have signed up, in particular their experiences with the ‘ad-free’ side of the platform.
Let me know your thoughts in the comment section below or tweet me @greg_borko.