YouTube Subscription Hopes Need A 'Content Is King' Reality Check

Is YouTube kidding? If so, who exactly is it trying to kid? Or is trying to save a little face?

Chief Executive Susan Wojcicki was speaking this week at a conference in America where she revealed that half of the Google-owned video giant's traffic is now mobile. That made perfect sense. The bit that didn't was that YouTube still believes that subscriptions represent "an interesting model." 

The problem is that YouTube has already found out what I've been blogging about for quite some time. People are finally realising that content really is king -- in fact, it has been king all along. After a few years where we saw the rise of the distributors -- such as YouTube in video, Spotify in music, and at the time, Netflix in television -- content creators and rights owners have fought back.

To recap, Spotify has given shares to the major labels, Netflix has invested in creating top shows, such as "House of Cards," and the major portals such as Yahoo are out there commissioning original content.

To put it bluntly, ask yourself this. What does YouTube actually own? Other than itself, and that's no bad thing, it is simply a portal through which people share their content with adverts that generally barely cover their costs but keep YouTube in the black. There are notable exceptions of people who have built huge followings -- but still, YouTube is the channel and not the creator or the rights owner.

It tried to get the likes of Sesame Street, National Geographic and UFC to charge for content so people wouldn't be annoyed at pre-rolls and pop-ups appearing at the bottom of the screen, but to be blunt, it flopped. The crazy thing was not only that someone thought people would pay for content on YouTube, but that the Google giant was actually going to take a 55% cut of revenue from subscriptions to content they held no rights to, just a viewing window.

Is it me, or should these entertainment brands have realised earlier that they have the content and they're not exactly unknown? Shouldn't they trust their own domain a little bit more, rather than YouTube?

So the long and short is that YouTube has tried charging for video. It didn't work.

Where they will undoubtedly stand a better chance is the upcoming YouTube Music Key service, which will effectively be Spotify with videos backed up by extra artist information, such as discography and tour dates. It will presumably see YouTube move from a free, or 99p, iTube or iTube Pro app to a monthly subscription service. Quite whether people will pay the $9.99 per month for the switch will remain to be seen.

I can't help but think that the minute a giant like YouTube moves from making money from someone else's content through adverts to making money from someone else's content through subscriptions, they are a batting on a very sticky wicket. Just ask Spotify. 

Involving the labels as Spotify has done would make sense.

Until YouTube wakes up and smells the coffee, that content really is king again, I can only see it running into trouble.

Incentivising the content creators is surely the only way forward for a subscription model and they have already shown how taking more than half doesn't work, particularly when there is so much free content all around it. Bespoke content with content creators properly involved and remunerated fairly is surely the only way forward?

So subscriptions and Yahoo -- I really don't see the model working right now. Can you?

1 comment about "YouTube Subscription Hopes Need A 'Content Is King' Reality Check".
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  1. Tom Goodwin from Tomorrow, October 29, 2014 at 10:02 a.m.

    I can see it working- I think you're thinking of now and not 1 year away.

    1) Auto play video ads are about the worst thing on the modern internet and becoming worse. To be able to experience YouTube without them by paying for lost revenue would be a quid per year.

    2) A lot of global content I can't access. If YouTube became the place to watch BBC in the USA, or The Daily Show in the UK, I'd fork over money very sharp.

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