YouTube has announced a new service: YouTube Red. For just $10 a month, users don’t have to deal with ads, they can save videos offline, and they even continue listening to a YouTube video in the background while they do other things on their mobile devices.
The ad-free component launches the last week of October, but come January, a YouTube Red subscription will also grant users access to exclusive content, like full length movies and original series, such as Netflix’s House of Cards or Amazon’s Transparent.
This change could have a ripple effect on the marketing world. YouTube is — believe it or not — the second biggest search engine on the web, and the third-most visited place on the Internet. Ranking well on search engines is also one of the most important marketing strategies right now. Search engine leads have a 14.6% close rate, while outbound leads, ones gained from direct mailing or print advertising, only have a 1.7% close rate. Yet if you want to get these leads, you have to rank well — ideally, within the first 10 spots on Google, Bing or YouTube. Research shows that 75% of users never even go past the first page of search results.
In other words, companies have a lot to gain by getting their videos to show up first when users search YouTube. A simple “how to” video from a landscaping company could bring in new leads if enough people see and share it.
“Both creators and users have been asking for a YouTube subscription service and that’s why we built YouTube Red,” a YouTube spokesperson told Gizmodo. “Today, the overwhelming majority of our partners, representing nearly 99 percent of the content watched on YouTube, have signed up. Videos of partners who don’t update their terms will be made private, but we remain committed to working closely with these partners with the goal of bringing them on board.”
As ominous as that sounds, it essentially means that what once was 100% free is now only 99% free. It matters most for people who are making money directly off of YouTube.
As for how it’ll affect companies who create YouTube content as a marketing strategy rather than fully relying on its ad features, no one is really quite sure, and no one will be until YouTube Red makes its debut.