YouDon’t Get It Red: Still Stupid, But it’s New-ish

Mkay, look here, kids. I can’t think of a snazzy intro at the moment, so what we’re gonna do is pretend like this is the greatest comedic triumph of blog post intros there is yet. This is November, so let’s all imagine I made a Thanksgiving reference that few people actually laugh at but also makes a beautiful segue into the topic of the blog post. Stumped? Me too. Here’s a prompt that’ll help you think of something once you finish reading the blog post: If you think that’s bad, well, a company we all know and love is about to pull an Uncle Earl and [insert verb] right into the [insert Thanksgiving food]!

And which company is this? YouTube.

YouTube is already a disaster when it comes to freemium royalties, but it’s been trying to start up a new gig for itself. The video streaming service has been pushing its paid viewing service, YouTube Red, on us for about a year now, trying to break into the premium streaming market. The idea itself of YouTube Red is interesting because it features some of our favorite YouTubers in big-time content like web series and professional movies. While this is really cool for the creators and YouTube personalities, the YouTube execs are soon to face a cold reality.

As of recent statistics, YouTube Red is projected to be losing money. The premium streaming service isn’t raking in as many subscribers as the business pros had intended. Here’s a sad fact: Jay-Z’s premium streaming service, Tidal, has more paid subscribers than YouTube Red. Tidal isn’t even a streaming giant. Compared to YouTube Red’s first year accruing of 1.5 million subscribers, Tidal earned itself 2.1 million subscribers; that’s a 28% deficit for financial stability on YouTube’s part.

In addition to the dearth of paid subscribers, YouTube’s business practices don’t necessarily make sense, if they’re looking at creating their own premium streaming empire. The biggest issue is that YouTube Red has only launched in four countries. Four. The United States, Australia, New Zealand, and Mexico.

(Really? Mexico? Four is certainly not a shabby place to start in terms of starting up this sort of a business, but Mexico would have been lower on my list. I think they would have easily matched or beaten Tidal’s growth rate if they had instead decided to launch in the United Kingdom. Or even Canada. If YouTube really wanted to get subscribers and globally diversify, I would have targeted a country like South Korea or Japan, where the tech culture is so strong, constant, and unavoidable, where people always paying for any upgrade or improvement to their technology.)

Even more puzzling about YouTube Red is that the execs seem unfazed by this deficit. Despite still having to carry a free YouTube and the new entity of YouTube Music, the company is planning on creating more content and uploading it to the service for 2017 and plans on growing the service even further in the time to come.

As you can see, I’m a bit befuddled, to say the least, by YouTube’s business practices. Personally, I would say to keep the free YouTube and YouTube Music. Based on business practices and the current trend of the music industry, a YouTube premium music-streaming service seems like the more viable option. YouTube Red’s having original content is not exactly a huge selling point. You know who else does? Netflix. Why should I pay for original YouTube Red content when Jenna Marbles uploads every Wednesday, the Holy Trinity makes movies apart from YouTube, and Sorted Food has its own weekly schedule on freemium YouTube? And why market to only four countries? It makes about as much sense as Live Nation having a festival venue in Yemen! (Honestly, I could rant about that for a while.)

The big thing this boils down to is that our market is not ready to pay for content that YouTube has been giving out freely, no questions asked, since its creation. YouTube hasn’t even asked permission to charge us yet. If YouTube had originally come out with paid ad-blocker that exempts you from pointless during your Vevo binges, I would have bought that in a heartbeat and then been more open to the idea of a premium subscription YouTube.  But they didn’t, so I’m not.

Dear friends in the music industry, learn a few things from YouTube’s folly. Free is a really good place to start, but don’t thrust people into paying for you all of a sudden; build you way up to it. Market the crap out of yourself because it is going to be a rare person who just stumbles upon you out of the blue and wants to be involved in your career. By all means, keep on doing what you’re doing and take risks, just be wise about it. Don’t be like YouTube Red, get your hopes up to delirium, and then find out you’re losing money left and right; no one likes that.

All that being said, have you found a snazzy way to associate this blog post with Thanksgiving like I told you to do in the intro? Me neither.

If you’d like to check out the article that prompted this blog post, you can click here.

If you’d like to spend a few hours watching your favorite internet personality or watching music videos, click here.

Once again, this has been the view from 214.

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