We know prospects for digital video revenues are encouraged by
soaring estimates, with big publishers doing everything to shift resources from the likes of display advertising, search and other digital areas to video platforms -- especially
“premium” video platforms.
That said, YouTube really isn’t in the “premium” area of the digital video world. But that’s not to say its short videos -- user-generated in large part -- aren’t doing yeoman’s work of pulling in big advertising revenues. Estimates are that YouTube had $5.6 billion in revenues at the end of last year.
But we know media companies -- as well as other businesses -- are all about spreading the risk, as well as looking for new revenue--generating businesses.
And so, Susan Wojcicki, YouTube’s CEO, said this at an industry event: "YouTube right now is ad-supported, which is great because it has enabled us to scale to a billion users; but there's going to be a point where people don't want to see the ads.”
She added that a subscription arrangement is "an interesting model" and that YouTube is "thinking about how to give users options."
YouTube does have paid subscription product, as a niche business, allowing some content creators to charge for access to videos they post.
YouTube has for a long time eyed the growth of Netflix and Hulu. Some years ago Hulu had the forethought to star its subscription model, Hulu Plus -- to compete with the likes of Netflix -- a service which trims, but does not eliminate, advertising content connected to its programming.
You think about Hulu, you think TV shows. Netflix? A library movies, and of course those new edgy TV series you can view in bulk: “Orange is the New Black” and “House of Cards.”
YouTube? Yes, we know the brand. It’s a lot of everything. YouTube will no doubt continue to let viewers opt out of watching pre-roll advertising after five seconds.
The question will be: Should YouTube start looking like other popular video sites, as a hedge for the future?