YouTube Red - F.A.Q
YouTube recently announced YouTube Red, a premium subscription service that offers an ad-free viewing experience, along with a host of value-added perks. The new service launches in the US on October 28th and will gradually expand to include other countries. The product page can be found here and the official announcement here.
Many creators are uncertain how this will impact their earnings, so we wanted to address some of the common points of misunderstandings:
Will viewers have to pay to see my content now?
No. YouTube Red is a new feature that gives users the option to pay a flat monthly fee in order to have an ad-free experience. It is different than “Paid Content” which puts your channel behind a paywall. Viewers who do not purchase YouTube Red will still be able to visit your channel like normal and will have a similar ad experience to what they do now.
Will YouTube Red negatively impact my earnings by decreasing Ad Views?
Although YouTube Red subscribers are not served ads and therefore do not generate advertising revenue, they will still contribute to your channel’s earnings. When YouTube Red subscribers view a video, the channel will receive a share of subscription revenue to make up for the lost ad impression. We will go into more detail on this below, but the short answer is that YouTube Red will not hurt your earnings. At worst, you should see very little change to your monthly earnings, but it is more likely that your channel will benefit from this program.
How is the subscription revenue distributed?
Just like with advertising revenue, YouTube takes a fixed 45% cut from the initial subscription amount and distributes 55% to content owners. This is the exact same revenue share as AdSense earnings, so there’s no change there.
To determine how much subscription revenue each channel receives, YouTube will aggregate viewing data from Red users to determine a value based on watch time. Watch time has always been an important factor for ad revenue due to its impact on CPMs and for being the main variable in search result rankings and video recommendations. With YouTube Red, watch time becomes even more important as subscription revenue will be shared out specifically based on it.
How do YouTube Red views compare to Ad Views for my revenue?
The short answer is that YouTube Red viewers should ultimately generate more earnings for your channel than a regular ad view would have. It’s also important to remember that views from non-Red users will continue to generate ad revenue as they do now without any change.
The main thing to keep in mind is that an individual ad view generates very little revenue on its own. Advertising revenue for the partner is calculated on a CPM basis which is the amount of revenue earned per 1,000 monetized views (or ad views). However, a large amount of views do not result in ad impressions for a multitude of reasons, so it is important when looking at advertising revenue to consider all the views that do not get monetized. This gets pretty complicated and CPMs vary widely. Just for a very rough idea let’s say a channel has a $4 CPM ($4 per 1,000 ad views), and then let’s speculate that half of the channel’s views are monetized. That would mean an effective rate of $2 per 1,000 total views received, or $0.002 per individual view (a fifth of a cent per view). This puts into perspective just how small of an amount each individual ad-supported viewer earns. That’s why ad revenues are calculated by units of a thousand views; you need a huge amount of volume to earn a notable amount with advertising.
The exact amount of money you will receive for each minute of YouTube Red viewer watch time will always vary based on viewing habits, and there are complex aspects of the distribution algorithm that are not disclosed by YouTube. For this reason, we can’t set a hard value on it to compare to. However, we do know that these users are paying $10 each month which means that even after Google’s cut and any minor transaction fees, there is still a large amount of revenue available to distribute to creators. As explained above, each individual ad-supported view amounts to only a tiny piece of revenue -- a fraction of a cent -- so it’s actually easy for any paid model to generate significantly more revenue on an individual user level. We definitely expect that YouTube Red viewers will generate notably more than ad views on average, at least once the trial periods have ended.
Will I receive earnings from “free trial” YouTube Red users?
Unfortunately, as users taking advantage of the free trial are not paying a subscriber fee, there will be no revenue to distribute. However, since paying Google Play Music subscribers will be joining YouTube Red from launch day, there will be some YouTube Red funds to distribute to channels from day one. In fact, YouTube’s Creator Blog post on the topic implies that they feel this will be enough to make up for lost ad revenue. They say that even with trials the community will make as much or more than they would have without the YouTube Red program.
It’s worth clarifying that you will still continue to receive your normal ad revenue from free users. This will also include viewers who are located in regions where YouTube Red is not yet available, as the new program is launching only in the United States before being rolled out to other countries.
I don't remember agreeing to the new terms - are my videos going to be set to private?
As a Union for Gamers partner, we already accepted the new agreement on behalf of the entire network in preparation for this program’s launch. This means you don’t have anything to worry about on your end and your videos will not be set to private. Our partners are all ready to benefit from this new program.
What changed in the new monetization terms? Should I be worried?
The new agreement is a minor update to the already existing YouTube Partner Program Terms. The new terms add a clause concerning subscription revenue, stating that 55% of subscription revenues will be shared out to creators (exactly the same as ad revenues). It does not make any changes to licensing, creative control, or any other areas that might be cause for concern.
How will this impact my contract and revenue share with Union for Gamers?
You will continue to receive a full 90% on all your channel earnings, which includes both your usual ad revenue as well as the funds you receive for YouTube Red subscribers.
Where will YouTube Red be available?
YouTube Red is initially launching in the United States and will be available starting October 28th. Unfortunately we do not yet have a timeline for other countries, but they have stated that they are actively working to bring it to more countries soon. Hopefully we hear more on this after the initial launch!