YouTube Red is YouTube's next grand experiment. And the fundamental question, of course, is whether it can succeed (i.e., achieve meaningful user conversion) (i) when it is priced the same as Netflix (and currently more on iOS where it is $12.99/month to deflect Apple's 30% bounty), (ii) when "free" video is practically ingrained in its DNA (and, as a result, our DNA), and (iii) when a significant percentage of core users are credit card starved.
Here's the thing. YouTube was a grand experiment from the start -- and the odds were stacked against it. I know from personal experience, because I too was raising (or trying to raise) capital for a YouTube-like UGC video service even before YouTube (a service which ultimately became Veoh) and faced the blank stares of VCs who just didn't "get" it. Yet, YouTube was born. And, in the process, YouTube spawned the entire digital video eco-system that has transformed our lives. Let's not forget that.
YouTube is a behemoth, as a result. And that makes it an easy target. Is its 55/45 creator split fair? Does it understand the needs of creators? Few will ever be fully satisfied, and there is no right answer on these kinds of issues. The organically evolve over time -- and then ultimately become "the rules of the game" (although that doesn't mean that those rules can't, nor shouldn't, continue to evolve amidst evolving realities -- including transforming market conditions).
And that's precisely what's happening here. YouTube no longer stands alone as a behemoth in the overall world of digital video. The playing field of giants -- like Facebook and Snapchat (and new giants like Verizon's Go90, Comcast Watchable ... as well as Netflix, Amazon and Hulu that increasingly will square off against YouTube over time) -- continues to accelerate at an astonishing rate. And that doesn't even account for all the "Davids" out there like Vessel and the entire world of MCNs/MPNs. All of these players are changing (and have already changed) the game via their own experiments -- launching new forms of experiences (including new original premium programming) and new business/pricing models in the process.
And so YouTube must adapt. It must try new things. Not all of them will succeed. There are no guarantees here -- and YouTube Red's Netflix-ian pricing presents a challenge (although, given YouTube's mass volumes, even a very low level of free-to-pay conversion can drive significant revenues). But, while YouTube Red's roll-out certainly could have been accomplished more elegantly based on my discussions with creators, the new service does bring new options/choice for consumers. And that's never a bad thing. Ad-free. New original programming. And its oft- overlooked YouTube Music service.
Experimentation. Evolution. Entrepreneurial characteristics that are difficult to knock. I know many YouTube executives. They are passionate about their mission. They are committed to innovation. They are committed to their users.
And they absolutely want their experiences to be the best.
Nothing wrong with that.