YouTube is a video sharing social network that relies largely on advertisements for support. The website is now moving in a new direction, attempting to capitalize on the market created by subscription services such as Netflix and Hulu. This new service is called YouTube Red, and will cost users $9.99 a month. Not unlike Netflix, YouTube Red plans to create their own content as well as show videos already on the platform ad free. This content seems to be targeting the younger generations because they are made largely by YouTube stars that already have a large following in this demographic area. According to Amanda Walgrove, YouTube Red will have three “huge implications” on marketers.
- New Content– Youtube Red is currently producing original content, making them a competitor for both companies who currently curate content, and for those that do not. Their shows, targeting Generation Z and millennials, are created by current YouTube Stars. This is appealing because these stars already have large followings who may be willing to subscribe to see this new content.
- Disrupting Pre-Roll– Because YouTube Red will eliminate advertisements for subscribers, eventually people will lose tolerance for advertisements played before the video they are trying to watch. With YouTube Red’s target market currently aimed at the younger demographic, marketers may now have to find new ways to reach this audience. If advertising on YouTube becomes non-beneficial for marketers, and Red does not take off like expected, then YouTube may lose their rather plentiful revenue stream.
- The Future of Red– YouTube Red prioritizes original content, so brands that create this content will have a better chance of being heard. This type of digital marketing should be content that can stand alone, and will subtly brand so as not to frustrate consumers. This type of content may become a perfect alternative to the thousands of advertisements that flood consumers’ minds each day.
Overall, YouTube Red definitely cannot compare to Hulu or Netflix yet, but this move is a step in a new direction for digital that may be monumental for marketers.