Is YouTube Red Good for Creators?

Yes. But…

Yesterday, YouTube announced that their much-discussed subscription system will be a real thing. People will be able to pay $9.99 for ad-free YouTube, mobile downloads, and a music streaming service.

It’s all of YouTube…everything, ad free, no questions asked. And, because of that, companies who don’t sign up for the system will have their videos made private in the U.S. until they do sign up. That’s a bummer, but it’s easy to see why. YouTube doesn’t want paying users to occasionally encounter an pre-roll on some hold-out’s video and as a user, I wouldn’t want that either.

Aside from fear about that, the question I keep being asked (from both creators and their communities) is whether YouTube Red good for independent creators.

The answer is definitely yes.

How am I so sure?

Let’s take a hypothetical YouTube power user. This person watches two hours of YouTube every day, roughly 400 videos per month. They’re diligent about not skipping ads and haven’t installed any ad blocking software. At a fairly standard ad rate of $2 per thousand views this optimal, ad-viewing person will generate around 80 cents of revenue for YouTube creators per month. Another 70 cents, roughly, are going to YouTube.

As I have said before, ads are a kinda shitty model.

It isn’t hard to see the advantage of a $10 per month subscription. A YouTube Red subscriber is creating, easily, ten times more value than a non-paying viewer…probably much much more than that. More money in the system is good for creators at every level.

So if we can safely say that YouTube Red is better, does that mean it’s great? Or even more fundamentally…fair? I’m afraid it’s hard to say at the moment. It’s going to take a while to see how interested users are in this program and how much of the revenue ends up getting distributed to creators.

YouTube (and Google) wants this to be massive. They are going to invest a great deal of their company’s resources into it. I completely understand that as advertising can only get you so far and Google’s lack of a consumer-facing subscription service is problematic.

And if it gets massive, it will be an amazing thing for content creators. The amount of revenue generated per view could double or even quadruple as people adopt the system. But if the cost to consumer is too high, that just won’t happen.

My final say on this, as someone who’s crowdfunding platform was acquired by Patreon and who, thus, owns a very small part of Patreon, is that you shouldn’t subscribe to YouTube Red if you just want to support your favorite creators. It’s not a bad deal for creators, but I doubt it will be a particularly huge deal per subscriber. Only if there’s mass adoption of the system will we see the bottom line changing significantly for creators. If you’re paying $10 per month to support creators, it would be way more advantageous for you to divide that up as a number of low-level Patreon pledges, or possibly just put it toward buying merch.

But, in my opinion, YouTube Red is a great deal if you hate ads and/or if you want a music streaming system with even more content than Spotify. And it certainly won’t hurt creators.