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YouTube enters SVOD market with Red - Vindicia

YouTube, the most popular video streaming site, has entered OTT (over-the-top) business by introducing its subscription video on demand product called Red. YouTube’s Red subscribers will have access to access exclusive content from YouTube stars that will only be available to paying members and the new subscription video on demand will not replace the free version.<br>Learn more about subscription billing: https://www.vindicia.com/solutions/subscription-billing/

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YouTube enters SVOD market with Red - Vindicia

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  1. YouTube enters SVOD market with Red © 2015 Vindicia, Inc. All rights reserved. Vindicia Confidential. 1

  2. YouTube enters SVOD market with Red Subscription models are booming business, and the need for subscription billing solutions has never been greater. In particular, OTT video platforms continue to increase in popularity. YouTube has just entered the OTT fray by introducing its own subscription video on demand product called Red. How will Red work? "YouTube Red already has 10 shows in the works." Red won't replace the free version of YouTube that consumers know and love, but it will provide an opportunity for users to stream content without advertisements. In addition, YouTube will join Netflix, Amazon and Hulu in creating its own scripted content. The U.S. pilot launched on October 28. According to CNN Money, YouTube Red already has 10 shows in the works that will be available to subscribers starting in January. In addition, subscribers will have access to access exclusive content from YouTube stars that will only be available to paying members. YouTube will charge subscribers $9.99 per month for these perks. "Consumers are embracing paid subscriptions for ad-free content at an incredible pace," Robert Kyncl, YouTube's chief business officer, said at a press event in Los Angeles Wednesday, Time reported. "[This] marks an evolution in our desire to give fans more choice and features that they love." 2 © 2015 Vindicia, Inc. All rights reserved. Vindicia Confidential.

  3. In addition to gaining access to ad-free content and unique YouTube programming, subscribers will also be able to save videos to view offline, much like Spotify Premium members can do with music. According to Time, mobile users will also be able to play videos while they browse other apps on their devices. If the turn to subscription billing works out for YouTube, there's a chance Red could become a major presence in the OTT video space. YouTube is run by Google, which is a powerful player in the digital space and will likely be able to fund high-quality programming to compete with the existing options. Why subscriptions? In the past, YouTube has made most of its revenue from advertising. However, even with its much-boasted 1 billion viewers, YouTube doesn't turn a profit, though it does manage to break even, The Wall Street Journal reported. Introducing a paid streaming service may enable the business to earn additional revenue. The move toward paid programming may also help YouTube reach new audiences. Right now, it's primarily known as a space for teenagers. High-quality shows may bring in fresh demographics. 3 © 2015 Vindicia, Inc. All rights reserved. Vindicia Confidential.

  4. YouTube is introducing a subscription service. 4 © 2015 Vindicia, Inc. All rights reserved. Vindicia Confidential.

  5. Given the direction other video platforms have taken, it's not surprising YouTube would implement its own subscription platform. However, subscription billing is smart from a business standpoint because it provides more consistent revenue to supplement advertising. Subscriptions are also convenient for customers and are an easy way for companies to predict revenue. One of the main challenges in introducing a subscription service in addition to free content is making sure the paid version provides enough value to keep subscribers interested. It seems like YouTube has successfully differentiated its products to make the value clear to customers. Most of all, YouTube's switch to a subscription billing model demonstrates how powerful this format has become. With the right subscription billing platform, many other businesses can take advantage of OTT too. 5 © 2015 Vindicia, Inc. All rights reserved. Vindicia Confidential.

  6. About the Author: Bryta Schulz Bryta joined Vindicia in 2013 and serves as Senior Vice President of Marketing. She is responsible for building brand awareness, creating go-to-market strategy and promotion, and driving growth. With over a decade of executive level marketing, product management and PR experience, Bryta has led marketing teams in enterprise technology and SaaS companies. Her experience includes heading product marketing at GoGrid, PGP, RSA and Symantec and business development and product management positions at Xcert, Thales, and Persistence Software. Bryta holds a MA in Translation from the Johannes Gutenberg University Mainz and an MBA from the University of Reutlingen. Visit our Blog for more information. 6 © 2015 Vindicia, Inc. All rights reserved. Vindicia Confidential.

  7. Thank You Like us on Facebook facebook.com/vindicia Follow us on Twitter @Vindicia Connect with us on Linkedin linkedin.com/company/vindicia © 2015 Vindicia, Inc. All rights reserved. Vindicia Confidential. 7

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