YouTube’s Subscription SVOD Service Wants to Play with the Big Boys

In late October, YouTube launched YouTube Red, a subscription service giving users an ad-free streaming video and music experience for $9.99 a month. Six

In late October, YouTube launched YouTube Red, a subscription service giving users an ad-free streaming video and music experience for $9.99 a month. Six weeks in and YouTube is reportedly meeting with Hollywood executives and other production companies to secure TV and movie streaming rights, says the Wall Street Journal. There are no details yet about what series or movies YouTube is pursuing.

As the world’s largest streaming video service, Alphabet-owned (formerly Google) YouTube will face off with the biggest over-the-top (OTT) TV companies, Netflix, Hulu and Amazon Prime. With a built-in audience of 1 billion free users and the largest 18-to-34-year-old market of any cable network, YouTube has real potential to cut into the premium streaming video market.

When we wrote about YouTube’s new subscription service in October, we didn’t think they’d be competing head-to-head with other companies. We expected them to fight for subscription dollars, but with vastly different programming, we didn’t see that one service would take the others customers. If YouTube does, in fact, secure exclusive, premium and original programming from mainstream TV and movies (versus YouTube stars like PewDiePie), Netflix and company could be in serious trouble.

Insider Take:

As Tech Times points out, YouTube will have to offer a strong line-up of streaming music, movies and TV to convert even a small percentage of its free users. With the financial backing of Alphabet though, YouTube should be able to secure enough premium content to be appealing.

If it succeeds with lucrative licensing deals, YouTube Red will most closely compete with Amazon Prime, because Hulu and Netflix offer streaming videos, period. In addition to streaming TV and movies, Amazon Prime also offers music, online photo storage, cloud storage, free two-day shipping and other membership perks. YouTube offers exclusive programming from popular YouTube stars, talks, concert clips, instruction videos, Google Play music and more.

Will Netflix, Hulu and Amazon Prime subscribers and members remain loyal, or will they jump on the YouTube Red bandwagon? We see some heavy competition on the horizon, but those who love cute cat videos, TED talks, the Fine Brothers, Rhett & Link and Michelle Phan, they’ll have to stick with YouTube.

It will be interesting to watch YouTube Red’s content and convert strategies unfold in the months to come. And, as always, we’ll keep you posted on new developments and deals.

Filed in Business Operations, Business Strategy, Consumer Services, Entertainment and Streaming, Mergers and Acquisitions, News, Product Development, Subscriber Acquisition

Dana E. Neuts

Dana Neuts is Subscription Insider's Editorial Director, covering our daily subscription news as well as member features, case studies, premium content, and reports. Dana is also a writer, editor, marketer and communications professional. Her work has appeared in AARP Bulletin, The Seattle Times, Seattle Business, 425 Business, 425 Magazine, South Sound Magazine, Northwest Travel and more. Her specialties include business writing, community news, senior issues, travel and, of course, subscriptions!