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.

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?