Yesterday (Oct. 21), YouTube announced its YouTube Red subscription service, which will allow users to pay $10 per month in order to watch videos on its website without ads. Red will also give users access to exclusive original content and two music services: Google Play Music and the upcoming YouTube Music. In terms of sheer amount of content, YouTube is hard to beat, but how will Red set itself apart from a bevy of similar video and music services?
Expert opinion suggests that the situation may not be as difficult as it appears. Although services like Netflix, Hulu, Amazon Instant Video, Pandora and Spotify already control a lot of the video and music streaming space, YouTube Red may still offer something unique: a service that splits the difference halfway between video and music content.
"There's a logical bridge between music and video, especially on YouTube, which has really been a powerhouse for both types of content," Paul Verna told Tom's Guide. Verna works as a senior analyst at eMarketer.com, and focuses on digital online content. "We're getting to a point, more and more, where there is not very much distance between those two. I think it makes sense for YouTube to roll them up into a single service."
YouTube Red is not the only service to offer both video and music, of course. Amazon Prime does, as does Spotify. However, the former's focus is clearly on video, whereas the latter's is clearly on music. YouTube Red might be able to split the difference in a way that no other service has done yet.
"Yes, YouTube is competing with Spotify and Apple and Amazon and lots of other players," Verna said, "but there's also just such a difference in all of these companies' approaches: their business models, their content profiles, the way some of them are hybrid ad-supported and subscription, and some of them are pure subscription. It leaves room for these companies, if they're smart about how they attack the market, to carve a niche that doesn't completely overlap with their competitors."
Original programming tends to be where video services set themselves apart from the competition, like later seasons of Arrested Development and The Thick of It on Netflix and Hulu, respectively, and original shows like Mozart in the Jungle on Amazon Prime. YouTube Red will have original programming as well, but from well-known YouTube entities such as PewDiePie and Rooster Teeth. That may not convince the Netflix audience to pony up $10 per month, but that may also not be the point.
"It's a fundamentally different audience. YouTube is looking for a younger audience that's snacking on content or watching stuff that's edgier and shorter," Verna explained. "I don't see them necessarily developing the next House of Cards to go head-to-head with Netflix."
YouTube already knows that there's a young audience with a short attention span that can't get enough of comedy skits, gaming Let's Plays and individual music tracks. That's how it makes its money already. We're not sure if that audience will be willing to pay $10 for a streamlined experience and some additional content, but we'll have a better idea when YouTube Red launches on Oct. 28.