The Truth about YouTube Red

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.

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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/.

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