Announced last week and launching in the US on Wednesday, YouTube Red offers ad-free videos, exclusive original content and access to Google’s streaming music service, Google Play Music. And they can get this all for $US9.99 a month (which just happens to be what current Google Play Music subscribers pay for the streaming service alone, and is also the price for Spotify Premium, Apple Music and Deezer).
Subscribers can download videos to watch offline, and switch to background play when, for instance, answering a call on a smartphone.
Content providers don’t do as well from the deal as they do with Spotify and Apple Music. They’re paid 55% of total net revenues from YouTube Red subscription fees. And YouTube has threatened to hide the videos of those who don’t sign up from paid and free service viewers.
Why should you care?
YouTube advertisers need not fret. We expect the vast majority of YouTube users will stick with free, and put up with advertising. But an interesting battle is brewing between Google, Apple, Amazon, Facebook, Spotify, Pandora and others, and content owners are caught in the crossfire.
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Jeremy is a Partner and Senior Consultant at SureFire. Jeremy has been working in search since 1996, when he joined the Australian search engine, LookSmart. After relocating to San Francisco, he was instrumental in the development of the company’s paid search ad platform. At analytics company Coremetrics (now owned by IBM) he established an in-house search agency managing campaigns for Coremetrics clients such as Macy’s, Bass Pro and Lands End. At Acxiom he managed members of the pioneering SEO firm Marketleap and worked with clients such as Capital One, American General Finance and Kaiser Health. Joining SureFire in 2009, he is the head of Paid Search Advertising and oversees the delivery of AdWords and other PPC campaigns. He also helps clients make sense of their website data.