SomeGuyDude
Just some guy, dude.
@Tarmack made a good point about the auction style of ads, but then you have to ask how much a company is going to be willing to pay if they're starting to have to drop higher and higher amounts for fewer and fewer imprints, that's where CPC and CPV come into play. If those start to get prohibitively high, companies simply aren't going to be willing to do it. We're not talking the Super Bowl here where paying $9mil for one minute has you in the households of over 100 MILLION viewers. This is paying more and getting less.
Sadly, there's no reason to believe that CPV/CPC have no ceiling. I'd wager they do, and that it's not a whole lot higher than current.
So we look forward. The less willing companies become to pump money into YouTube ads and the fewer ads are shown and clicked upon, the less useful that becomes as a source of shared revenue. YouTube stops looking at ads as the MODEL for revenue with a subscription as a way to help the site and skip ads, but ads turn into SUPPLEMENTAL income and the primary model is the SUBSCRIPTION.
Here's where it gets really ugly. We keep talking about content creators getting paid by the stream instead of by the ad view, but this can't work that simply because as soon as we're doing that, it's not longer shared revenue through ads... that's royalties. The ad model is YouTube saying "we'll share in the money your videos make", which works because your videos can only be either neutral (not monetized) or profitable (shared revenue). I'd wager YouTube really wants as many videos as possible to be monetized.
The per-stream model flips that on its head. Before, if I clicked that "monetize" button, it meant YT would get money from the ad imprints and then kick part of it to me. Under a PAYWALL model, clicking "monetize" would entitle me to a share of the subscriber money, but that subscriber is paying whether they watch me or they watch someone else. My channel is no longer profitable whatsoever, I'm asking for a hunk of revenue. What I "give" to YouTube is the subscriber boost they have from my videos existing on their platform.
Now it's possible that maybe YouTube WOULD just let any channel cut in on the revenue because, hey, they're gonna be watching SOMETHING, so why do they care if it's to me or to PewDiePie. You know who's gonna care? PewDiePie. Not him specifically perhaps, but the big channels are now going to be in a situation where everyone's vying for a piece of subscriber pie and, unlike before where businesses could bid higher for ads on your channel, now WE negotiate our rates.
Spotify's model: http://www.spotifyartists.com/spotify-explained/
This is how I would wager a streaming service with a paywall HAS to work. But the thing with all that... notice that little "royalty rate" over there. This is where things start to turn upside down. We now have a business relationship with YouTube, rather than letting the "business" part happen between YouTube and advertisers and we just get a hunk of the proceeds. We are getting paid BY YouTube and... I hope I don't sound apocalyptic here but I could see some big names not liking the royalty rates and going off to make their own service. Then we end up with, say, YouTube competing with Vimeo and DailyMotion the way Netflix, Hulu, and Amazon Instant compete.
This is just turning into a rough path because it can't remain the free-wheeling atmosphere of "users making content" any more. Just like you can't upload your own music to Spotify and your own videos to Netflix, I fear a time will come when getting on YouTube isn't so easy.
Sadly, there's no reason to believe that CPV/CPC have no ceiling. I'd wager they do, and that it's not a whole lot higher than current.
So we look forward. The less willing companies become to pump money into YouTube ads and the fewer ads are shown and clicked upon, the less useful that becomes as a source of shared revenue. YouTube stops looking at ads as the MODEL for revenue with a subscription as a way to help the site and skip ads, but ads turn into SUPPLEMENTAL income and the primary model is the SUBSCRIPTION.
Here's where it gets really ugly. We keep talking about content creators getting paid by the stream instead of by the ad view, but this can't work that simply because as soon as we're doing that, it's not longer shared revenue through ads... that's royalties. The ad model is YouTube saying "we'll share in the money your videos make", which works because your videos can only be either neutral (not monetized) or profitable (shared revenue). I'd wager YouTube really wants as many videos as possible to be monetized.
The per-stream model flips that on its head. Before, if I clicked that "monetize" button, it meant YT would get money from the ad imprints and then kick part of it to me. Under a PAYWALL model, clicking "monetize" would entitle me to a share of the subscriber money, but that subscriber is paying whether they watch me or they watch someone else. My channel is no longer profitable whatsoever, I'm asking for a hunk of revenue. What I "give" to YouTube is the subscriber boost they have from my videos existing on their platform.
Now it's possible that maybe YouTube WOULD just let any channel cut in on the revenue because, hey, they're gonna be watching SOMETHING, so why do they care if it's to me or to PewDiePie. You know who's gonna care? PewDiePie. Not him specifically perhaps, but the big channels are now going to be in a situation where everyone's vying for a piece of subscriber pie and, unlike before where businesses could bid higher for ads on your channel, now WE negotiate our rates.
Spotify's model: http://www.spotifyartists.com/spotify-explained/
This is how I would wager a streaming service with a paywall HAS to work. But the thing with all that... notice that little "royalty rate" over there. This is where things start to turn upside down. We now have a business relationship with YouTube, rather than letting the "business" part happen between YouTube and advertisers and we just get a hunk of the proceeds. We are getting paid BY YouTube and... I hope I don't sound apocalyptic here but I could see some big names not liking the royalty rates and going off to make their own service. Then we end up with, say, YouTube competing with Vimeo and DailyMotion the way Netflix, Hulu, and Amazon Instant compete.
This is just turning into a rough path because it can't remain the free-wheeling atmosphere of "users making content" any more. Just like you can't upload your own music to Spotify and your own videos to Netflix, I fear a time will come when getting on YouTube isn't so easy.
Last edited:
