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YouTube Red Has an Identity Crisis
By: Digiday
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What, exactly, is YouTube Red? That’s a question creators and YouTube network executives might want to ask more than two years after YouTube launched its subscription streaming offering.

During an onstage conversation at Recode’s Code Media on Feb. 12, YouTube CEO Susan Wojcicki called YouTube Red a music streaming service — which is the first time any executive from the company has referred to YouTube Red as foremost a music service. This differs from comments that other YouTube executives have made in the past, including YouTube’s head of global content Susanne Daniels, who last year described YouTube Red as a premium subscription streaming service that offers Hollywood-quality shows and movies.

Launched in October 2015, YouTube Red has always been positioned by YouTube as three services in one: It offers ad-free access to all of YouTube; it’s a music streaming service that also gives access to Google Play Music; and it’s consistently releasing original movies and TV shows, starring Hollywood talent and homegrown stars that users already subscribe to.

Two years later, this has created somewhat of an identity crisis for the streaming service. As Wojcicki said in her interview, she sees YouTube Red as a music service. And she does not expect to spend billions of dollars on content to effectively compete with Netflix, Hulu, Amazon and others. “We could, but I’m not sure that would further what we’re trying to do at YouTube,” she said. Creators, meanwhile, aren’t seeing much subscription revenue from YouTube Red, but they have been looking at the service as strictly a major content buyer willing to spend TV money on original movies and shows. One thing’s for sure: Subscriptions aren’t a meaningful moneymaker on Red just yet.


Subscriptions are driving scant revenue
According to five media executives that oversee multiple high-performing channels on YouTube, YouTube Red subscription revenues are scant compared to the money they can make from advertising. One executive at a network that gets more than a billion views per month on YouTube said YouTube Red subscription revenue accounted for about 7 percent of the network’s “YouTube-monetized” revenue in 2017. “That’s with just what YouTube monetizes and doesn’t include [the ads and sponsorships] that we sell,” he said. “If you add in what we sell, it becomes less than a percent.”

The four other media executives shared similar findings. One executive at a network that gets hundreds of millions of views per month said YouTube Red subscription revenues account for more than 10 percent of the network’s total YouTube-monetized revenues. Another executive, poring over data for a channel with more than 1 million subscribers, said the channel has made around $4,000 from YouTube Red since last summer.



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About the Author
This article was published on Digiday.com.  A full link to the original piece is after the story. www.digiday.com
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