Solutions to “Free” vs “Paid” Debate About Online Video

Our friends at ReelSEO revealed the Pew data showing viewer’s surprising willingness to pay for online-video content. Until recently, I’ve been nervous about the notion of any subscription or pay-per-view model because it’s likely a “deal killer” for most viewers watching amateur creators. Sure I’ll pay to license/buy The Guild or Dr. Horrible, but less so for vloggers and amateurs (love ya, Charles Trippy, but “Internet Killed Television” is working quite well as free).

I’ve long maintained that the marketplace depended on advertising revenue since YouTube viewers are accustomed to free content. I believe the vast majority would protest a fee-based model — whether a token “pay-per-view” or modest subscription charge. Still, some would pay to avoid ads and access “extras.” But let’s try to avoid the dreaded but inevitable “one-two-punch” models ($7.99 Hulu plus– where the “plus” stands for ads) that subject viewers to both a subscription and advertisements. I’m still sometimes perplexed why I pay for CableTV and get subjected to advertisements. Then again, it worked with magazine subscriptions.

Note: this post is me sculpting fog, and is subject to errors in logic. I hope you’ll comment so we viewers (and advertisers) can “crowd source” a solution.

Paywall of Doom (click for source)

A solution to the free vs. paid debate can be simple to the viewer, but certainly has nuances. The trick is that the model can’t be black or white, or binary. We need to provide viewers with options based on the proven success of “freemium” in software. “Freemium” refers to a trial version with limited functionality that is free, coupled with a paid premium offering (usually offering more stuff we value) that sustains the provider’s economic needs. This differs from the loathed “paywall” model that suddenly restricts content access to paying subscribers, a model that would certainly flop in the democratic and entitlement era of YouTube. Here’s what I propose:

  1. FREE CONTINUES: Maintain free content for everyone with pre-rolls, Invids, banners, and Ding-Dong Fat Mamas (I made that last one up, but it’s not far from real terms like “takeovers” and “Fat Boys“).
  2. PAY MODEST FEE TO ENJOY “AD-FREE” VIEWING: If the ads become intrusive, the viewer could chose to “opt out” 0f ads by paying a token fee (but volatile and difficult to preemptively set). A small fee today could easily offset the majority of paltry per-view payments that YouTube and the Partners receive from advertisers. The ad prices are now artificially low since the medium is new, and the media market hasn’t yet realized video’s impact. The problem, of course, is that fee is based on the advertisers perceived value of the particular audience. But common… if CableTV figured it out, so too should Google.
  3. VIEWERS SUBSCRIBE BY VOLUME?: It would be difficult to offer a “subscription” fee at a channel-by-channel level. So this might better work as a comprehensive volume-based subscription. I imagine few Partners would have much luck creating an individual channel paywall. I’m one of a growing number of viewers, however, who would rather pay a few pennies for preroll-free videos and temporary “advertising immunity”… Those repetitive, unstoppable prerolls are what I find especially intrusive. In a great act of hypocrisy, I reluctantly subject my viewers to them because they’re far more profitable than InVid ads or penny-auction surrounding banners. To keep the solution fair, the user might purchase a bulk number of ad-free views in a beta (sufficient for a month’s worth of views, for instance) and continue if they wish.
  4. PAYWALL WITH EXTRAS: Another model, albiet more complex, would offer subscribers additional “value adds” such as higher quality content, earlier release dates, or “extras.” This undertaking would depend on the percentage of the audience that would be willing to pay, and that segment that would certainly be small at first (thus decreasing creator motivation to produce extras). While I can’t envision more than 5 percent of YouTube viewers currently opting to pay, it might qualify them as “super viewers,” and I’d expect most YouTube Partners and YouTube to find ways to reward them fairly as VIPs.

The reason YouTube and other platforms ought to experiment with these models is that this: The noble attempt to earn money to encourage more creators and generate site profitability is, I believe, beginning to create “audience fatigue.” These ads are, currently, generating only a fraction of what preroll ads are likely worth. They’re also diminishing in value to brands if the frequency gets excessive per viewer. So I encourage YouTube or a smaller site to conduct a trial with viewers — giving them a choice, and ensuring that the “holdouts” don’t feel unfairly deprived (for instance by having their video quality diminished from what they’ve grown accustomed).

A few tips, since this hasn’t been with success in web video yet (for some valid reasons):

  • This would have to be done carefully. As I mentioned, it would also be difficult for a viewer to select what “channels” to which they’d pay to subscribe sans ads– due to the varying individual tastes of viewers and the volatile quality/style/frequency of YouTube Partners. Unlike the relationship between network shows and fans, these relationships are less predictable. We also don’t want to create an awkward hierarchy among Partners (especially in a community forged with democracy and sharing). Again, if only one group (TheStation) created a perceived or real paywall, it would go over like a fart in church. Viewers resented when the comedic duo, Smosh, started moving viewers to Live Universe (alive?).
  • The most practical and turnkey approach would involve a website (YouTube) allowing viewers a generous monthly number of ad-free views to those who paid a very modest flat fee. I acknowledge that the “devil is in the details.” The worth of an ad-free view varies tremendously based on the perceived value of the Partner’s audience to an advertiser. Due to advertiser’s particular desire for certain demographics (not content, or your perceived quality of it), a view of ShaneDawson or Annoying Orange might command a radically lower CPM or CPC than, say, Mediocrefilms or Blame Society. So a pricing model would be difficult to set based on the viewer. I may be stretching here, but there’s a potential “self healing” solution: presumably wealthier, affluent individuals are worth more to advertisers (and perhaps more prone to paying). Teenagers can sometimes be worth less at a CPM, so they’d pay less or just suffer the ads. Yes I realize we’d all change our YouTube profile age to “born 1989” to “game the system,” but Google owns Doubleclick, kids. Don’t think it doesn’t know what you had for breakfast.
  • Finally, it would have to be as easy as buying a show via AppleTV or iTunes. If I’ve got to remember my Paypal and input a credit card, my price sensitivity changes drastically.

Thoughts? How much would you pay to skip a pre-roll or avoid them completely? Or have you grown immune to their presence? What if suddenly advertisers wanted to pay more than you would to avoid them? How would you propose YouTube and other platforms adjust to balance the needs of two important constituents: we viewers and the brands seeking our hearts and wallets?

Author: Nalts

Hi. I'm Nalts.

19 thoughts on “Solutions to “Free” vs “Paid” Debate About Online Video”

  1. I would pay a few cents to skip pre-roll advertising. Most of the time I hit *mute* on a pre-roll, but I do watch it’s video content. InVid ads are completely ignored by me, except to see how quickly I can click the close “x” and resume watching my video.

  2. I love ads. I would pay to skip pre-rolls but still watch the Ads. I would pay to watch my own videos and watch the Ads, their great. Support the community or get out of dodge.

    BC

  3. I don’t have a problem with ads. I find that the free firefox plugin ‘Adblock Plus’ does a great job of blocking prerolls, invideo and the regular adsense block next to the video. The ONLY time I see them is when I turn Adblock Plus off, which I seldom do.

  4. To the anti-ad people. One states, they click the x then continue watching “My Video”. It’s not your video, someone created that video. If you liked, or were interested enough to watch what you call “Your Video” you would not have a problem sitting through a short at, to support your content provider. Then there are the fools who believe their really clever with their ad-blocker plugin. Heres is a little information for you. You represent a very small percentage of viewers on YouTube, and yours will never be the majority. Ray William Johnson, gets over 1 million views on every video he post in the first 18 hours. Every Ray William Johnson video has a pre-roll. Your x clicking or ad-block plugin, is not effecting Ray William Johnson’s pocket book. Annoying Orange, also runs pre-rolls on all videos, and again your stupid “I shouldn’t have to watch and ad to watch “My Video” attitude is irreverent. Many videos I watch are random, but the people I follow on YouTube RWJ SHAYTARDS Annoying Orange, Nalts etc. I look forward to them posting a video, and a 30 second ad is not going to stand in the way. On top of that, I love their content and I want to support them. You people that bitch and moan about ad’s don’t even understand how big these YouTubers audiences are. These people go on vacation and find gifts on the window of their vans from local fans. You think Ray William Johnson or ShayCarl, stay up late at night worried that they might go broke if enough clever people start using AdBlock?. Give me a break, these guys make more in a couple of months than you make in a year. Your the same idiots that bitched and moaned about broadcast TV going digital and how the government is forcing you to buy a digital converter. Your the same idiots that made sure you got your 40 dollar coupons Limit 2 per Household. And then complained that the boxes were more than 40 dollars when you got to the store. What is it you AdBlock idiots do, to make a living in where you don’t need to advertise. What perfect company or product do you have that need not advertise. Perhaps your in the medical field, where the doctor is the salesman, selling useless medication with terrible side effects, so his office can be decorated with clocks and coffee mugs with, and all his employees can use a pen that states the name of the drug company that the doctor pushes it’s poison. As I write this Phil DeFranco just uploaded a video. Should I not watch it, because he does in-video ads for State Farm insurance?. Get over yourselves, and stop being little bitches that cry and moan about everything. And heres the difference in me and you, if Nalts removes my comment, because it’s a bit ignorant. No problem, Ill make a video about you AdBlock idiots and post it on YouTube. You idiots don’t represent the YouTube community. Even Trolls have the decadency to sit through pre-rolls and support us content partners. The last idiot’s name that posted a comment was “nobody” that fits you well, as your “nobody”. And before you say I am wrong, if I am wrong and you are right, than Google as an ad agency is worried, and trust me, their not worried. Now go click your x on “Your Video” bitch.

  5. Way too many words here. Even the comments have too many words.

    Oh, and I don’t like ads. Any ads. Don’t care if they pay for your video. I don’t like them.

  6. Who cares what you like. Google is the fastest growing company in history, and it’s and advertising company. Just like the trolls on YouTube. I don’t care if you like my videos or not, I get paid either way. And sorry that there are too many words for your short attention span to take in. Heres a word for you FART FART FART FART FART

  7. Good grief. I don’t know what you’re on about, BuddhaCharlie. Do you really think people block ads to try to hurt RWJ or AO? I block ads on YouTube because they are super annoying and completely irrelevant to my interests. If I actually thought I was significantly hurting creators profits, I might consider turning the ads back on (I do have my ad-blocker disabled on some sites I want to support that actually care about the quality and relevance of the ads they show).

    Kevin, the problem with paywalls for ad-free content and pay-per-view (a la iTunes) is that it’s extremely easy to turn on an ad-blocker on YouTube and kiss the annoying pre-rolls and in-video pop ups goodbye, and nearly as easy to download for free a movie via torrent at *higher quality* than available via iTunes. The only way to force people to have to see your advertising is to actually include it organically in the content. That’s not as easy as turning on AdSense and having algorithms surround your content with crappy banners and pre-rolls, but it’s more likely to actually make a lasting impression and lead to sales conversion.

  8. I would be willing to pay on an ala carte basis for access to the content I wish to view. Or a subscription, again ala carte, but with no penalties for early termination for complete access to all content for a particular provider.

    Maybe more for ‘without commercials’ but that would depend on how intrusive the commercials are. TNT style with commercials (30 minutes on, 30 off with sped up content to allow space for the commercial) nah. Regular network style (41 minutes on with 19 minutes commercials) maybe, if I can fast forward. Hulu style (41 minutes with 5 minutes but forced to sit through the commercial presentation. Almost like traffic school.) Maybe, but don’t charge an arm and a leg.

    And I want all premium content no exceptions. Get the licensing crap worked out. It shouldn’t matter what device I watch your stuff on.

    My desire is to cut the cable provider middleman completely out of the loop and limit their ability to force a menu of choices on me. My provider offers over 800 channels of complete crap and redundency, of which I watch about 20 on a regular basis.

    So what that means to me is that they’re cluttering up the bandwidth with a bunch of junk that most people wouldn’t be willing to or are flat unwilling to pay for.

    Since the tech is there to allow a flexible system, then they should quit holding us hostage with fees and inflexible plans and just get on with the obvious evolution.

    That is all.

  9. @buddacharlie I really don’t differentiate between amateur video or pro. Content is content. If the the main goal is to supply democratic access to content then it should be seamless to the viewer. And the viewer has the option to watch or not.

    The problem is on the supplier side. If YouTubers are willing to supply, under contract to Google, premium content that might receive more money elsewhere, then that is between them and Google.

    @everyone else. Ads are great! I just hate being forced to wait and watch them, especially if I have seen them over and over and over and ….

    well I guess I need to pee sometime…

  10. Sweet. It’s about time we had a lively debate on this old rag. Let’s take it to IRL. Get to Philly on March 17. BuddhaCharlie- you come too with an ad on your chest.

  11. Hey man Im coming to Philly. Edbassmaster said he would do a drive through prank with me. Ed may be the first to have a Hollywood career thanks to that terrible company that puts ads on videos YouTube. I need to meet some of you guys before VidCon. I figure Nalts is like the kevin bacon of YouTube, even the big heartless Tubers like ShayCarl like Nalts. Remember ShayCarl is so big, that it would be like trying to get in touch with Brad Pitt. But you know, I’m special, thats why PrincessTard has watched 2 of my daughters videos. That is why ShayCarl always returns my tweets. Because you know him and I go back, way back,,,

  12. I block all ads – just the way I roll…

    If they asked me nice and said if you enjoyed this program or ditty will you kindly watch our ad, I’d do it.

    If they decide to charge or block my access, doesn’t matter – the net is big, stuff pops up, packets are everywhere.

    I like what David Burn and Trent Reznor did – here, pay if you like our stuff.

    I realize probably maybe most people can’t be trusted to do that – that’s US culture, but if I like something I’ll pay or click.

    For products that aren’t for sale the best I can do is spread. Spreading to me is a gesture of gratitude an appreciation for one’s time and effort.

    One thing I would like to see more of – an attitude of gratitude. It’s amazing how far that really goes.

  13. What ads? None of those automated ads are relevant or useful to me in any way whatsoever so I block them. I like ads on smaller, niche sites that choose their sponsors based on their audience and truly add value by offering special discounts, etc.

    As far as pay per view/subscription, I can’t imagine that ever happening (at least for me). I love Youtube and all but it’s still just that, Youtube. The content is (for the most part) of subpar production quality and my life goes on without it just fine. The same could be said for cable TV (life going on without it) but people pay for that, right? Well, I don’t pay for that either and I don’t know too many younger adults like me who do either. Perhaps things are changing.

    The internet is a great tool to reach precisely the market for your products, none of this shotgun blast of generic advertising and hoping something sticks. Why not use that? If a channel I truly enjoy tells me, “I really like this product and I think you will too.” I am likely to hear them out because they have earned my trust.

  14. @17 Exactly. If I were forced to watch worthless ads on YouTube, then I would pretty much stop watching all together. I have cable at my place as part of my lease, but I don’t own a TV since the advertising is too obnoxious and the content isn’t good enough to make up for it.

    Nobody owes me free entertainment, but if you beat me over the head with crappy ads, then I’ll find something else to keep me entertained. Relevant advertising is great for everyone, but random crap served indiscriminately is offensive to me. I don’t appreciate my subconscious being infected like that.

    @BuddhaCharlie, I haven’t seen anyone here whining and moaning, so I really don’t understand what you’re being so hostile about. I have no obligation to be marketers’ bitch so they can keep using tired and lazy CPM schemes instead of innovating. Their troubles are not my problem, so unless they can develop something palatable, I will continue to avoid their work whenever possible. They have the freedom to make rubbish and I have the freedom to block it. They owe me nothing and I owe them nothing.

  15. As someone that’s fairly new to the Youtube partner program I’ve got mixed feelings about advertising. On the one hand I have to say that most of the advertising I see on youtube, including what shows up on my own videos, is almost all irrelevant to me and it’s not something I’m very likely to ever click on because of that.

    On the other hand, when advertising shows up on videos by people I’m subscribed to, preroll or not, I’m fine with letting it roll in support of people whose videos I like enough to subscribe to them. 30 seconds really isn’t a big deal and if they can earn some CPM from it I’m good with that. Besides, a 30 second preroll beats the snot out of six or seven one to two minute or longer commercials per hour on Hulu! Comparatively speaking, Youtube is light years better.

    Honestly the only complaint that I have with the so-called “big time youtubers” is that not only are the same ones almost always on the front page but that YT has buggered the “browse” function to the point where it’s bloody difficult to find new stuff by relative unknowns that I’m not already subscribed to.

Comments are closed.