Comments for YouTube turns freemium Thomas Margraff 27 April 2016 I would start my comment by clarifying my position regarding digital media, and in particular Youtube. As my opinion will of course be highly influenced by the use I make of it and by my opinion, it’s important that the reader knows where I stand on this. I would describe my self as a “normal-to-high” user of digital media. I…Read moreI would start my comment by clarifying my position regarding digital media, and in particular Youtube. As my opinion will of course be highly influenced by the use I make of it and by my opinion, it’s important that the reader knows where I stand on this. I would describe my self as a “normal-to-high” user of digital media. I go on Youtube on a daily basis, mainly to listen to music as I browse the web. I find strong interest in those kind of media and love reading/learning about them. With that being said, let’s get down to it. The first question to address is whether Youtube Red is a smart move. Well, before going any further let’s have a look at what the numbers are telling us. Youtube is yet to release any number about their amount of paying subscribers and rumours and talking about a between good and mixed success. What’s more interesting is the forecasts. It would seem like this new paid service could become Google’s biggest growth driver. Even the most conservative forecast are being very optimistic, take a look: if Youtube manages to convert 3% of its 1 billion subscribers (which is nothing compared to Pandora’s 5% or Spotify 25%), it would account for 4,5% of Google’s operating income by 2022. Quite impressive. As it is said in the text, it would appear that Youtube isn’t a profitable business as for now. Something had therefore to be done and Youtube Red could be the right answer in a period where ad-blocking systems are threatening advertising-based revenue. Although the service looks very promising, it is still in his very beginning and a lot of questions and problems are still to be addressed. First and most important, is Youtube Red worth paying for? What’s the real added-value for consumers? To this point, I’d say that it’s still unclear. Regarding the ads, Youtube just made a very interesting move. Just this morning, they’ve announced that their new ad format will be 6-seconds unskippable ads before videos. Advertising wasn’t really bothering on Youtube until now, this might very well change with this new format, increasing in this sense Youtube Red’s value. Spotify’s example shows us the power of ad-bullying on the conversion rate. It is well-known that Spotify’s ads before songs are one of the most annoying. Well, look at their conversion rate : 25% and growing. So the ad-free value seems to be heading to the right direction. The next question to tackle for Youtube will be about content. Is Youtube’s content worth paying for? That’s a tough question to answer. For someone like me who’s listening to music and watching a few videos, definitely not. I’d rather pay the same price for Spotify, Apple Music or Tidal. But it’s really hard to speak about that objectively, since I know that there’s a great part of Youtube’s users that are binge-watching bloggers’ content. We also have to keep in mind here that Youtube Red is at the same price as Netflix. That’s a tough comparison for them. Very few information have leaked about Youtube’s coming exclusive content so it is hard to say what to really expect. The challenge here will be to create something new, different from Netflix’s series and films but still worth paying 10$/month. That’s without a doubt an exciting innovation challenge to keep in sight for the months to come. Finally, let’s address the question of how are we going to pay for digital content in the future? In my opinion, one business model can’t fit every service. The concept of network effects takes his whole sense here. Do consumers find value in the fact that there are other users using the same platform as them? That’s the key to me. For services such as music platforms (Spotify, Apple Music, …), films/series platforms (Netflix, …) that’s most likely not the case. Although there’s always a small part of sharing content with your friends, such as playlist, reviews, etc., at the end of the day I don’t really care whether or not some others are listening to music and watching films. For Youtube, I think that’s a whole other story. Youtube acts way more as a community and interactions between users or between users and creators are far more developed. The success of the platform lies in the fact that there are a ton of videos and a ton of bloggers (to everyone’s taste) to watch. The other way, the interest of bloggers and content creators lies in the fact that the Youtube community is absolutely huge and they know that their content can reach a whole lot of people. Knowing that, it would be risky to make the service a paying one. That would, in my opinion, reduce the number of users and therefore the interest/success of the service. While Netflix and Spotify can afford and even have to make their users pay, Youtube can’t take the risk of an aggressive move in this direction. So what’s next for us, consumers? Tough to say. If I was to give my opinion, I think that freemium has already shown great signs of efficiency and is therefore going to expand even more. But I think that all the cards have yet to be dealt and that innovation is coming on the field of monetization. That’s a problem a lot of digital giants are facing and I can’t imaging them struggling with that for a very long time. Google could even already be a step ahead of everybody with his idea of combining services. While other above-mentioned digital moguls are acting on a particular market, Google has an actor on several markets. They’ve already taken the first step in combining those services and I could very well see interest for users for such global services. Google is far more advanced than its competitors in this field and they’d be wrong not to use this advantage. References : http://qz.com/592514/youtubes-new-paid-service-might-become-googles-big-growth-driver/ https://www.entrepreneur.com/article/253511 http://www.androidauthority.com/youtube-unskippable-6-second-ads-689442/ http://digiday.com/platforms/watch-free-go-red-youtubes-long-term-plan-get-people-pay/ http://variety.com/2015/digital/news/youtube-red-launches-10-per-month-1201629071/ Show less Reply Paul Belleflamme 27 April 2016 I like the distinction you make between Netflix, Spotify on the one hand and YouTube on the other hand in terms of network effects. Maïté Hörold 27 April 2016 With the launch of its new subscription service YouTube Red, YouTube is now part of the companies offering a service based upon a freemium business model. Freemium illustrates a business model in which a company offers a core product for free to a large group of users, in this case the service provided by YouTube as it is now, and…Read moreWith the launch of its new subscription service YouTube Red, YouTube is now part of the companies offering a service based upon a freemium business model. Freemium illustrates a business model in which a company offers a core product for free to a large group of users, in this case the service provided by YouTube as it is now, and sells premium products to a smaller part of this user base, in this case the service provided by YouTube Red (1). The latter offers three main benefits: ad-free videos, offline viewing and background play. Furthermore, YouTube Red subscribers will get access to an exclusive members-only content comprising shows and movies that are solely produced for the platform. Given consumers’ behaviour regarding advertisement and the rise of subscription-based models in the entertainment industry over the last years, it comes with no surprise that Google has developed a freemium business model for its subsidiary YouTube (2). However, the big question, whether the features proposed by YouTube Red are sufficiently enticing to convince users who have been used to free content for such a long time to pay a monthly subscription, remains. To start with, moving from an advertising-revenue-based model to a balanced subscription-based model seems to be smart move for YouTube in order to respond to the changes in the marketplace. In fact, as stated in the article above, the measures undertaken by users to avoid advertising, either by skipping pre-roll ads or by installing an ad-blocking software, have been increasing steadily over the last years leading to direct and indirect losses in YouTube’s revenues. Although it is still too early to make predictions, the future looks rather promising for YouTube Red as the platform was said to be beneficial from a revenue standpoint back in December 2015 and consumers seemed to be willing to pay for the content provided by the platform (3). Despite the consumer’s willingness to pay to have access to an exclusive premium content, it is clearly not sufficient that the content is only ad-free (2). Hence the importance of creating high-quality content that distinguishes itself from the one proposed by competing platforms such as Netflix or Amazon Prime and that is exclusively available on YouTube Red. With the introduction of its first original shows and movies as well as the backing of several famous vloggers such as PewDiePie, the company is on the right track. Thus, the success of YouTube Red will mainly depend on the company’s ability to attract creators and producers providing content that users are willing to pay for and that is exclusively available on the platform. In this context, I am not sure if it is a smart move to make the original content provided by YouTube Red available for free and with ads after a certain period of time (4). Because why would consumers be willing to pay a monthly subscription for a content that will become available for free anyway? What is certain is that if YouTube Red is a success, Google will occupy a leading position in the market by offering a set of media types available through a monthly subscription. As regards the future of the payment for digital content, there is a diversity of views. As already mentioned above, a certain tendency to adopt a subscription-based model within the entertainment industry has been observed. Indeed, consumer buying habits have changed over the years with consumers looking more and more for convenience and subscription-based-models represent an efficient means to respond to those needs (5). In my opinion, freemium business models, typically characterized by subscriptions alongside an advertising business, have the potential to become the norm, in particular in relation to digital media content. In fact, this model allows the company to benefit from a large user base and to create a profitable business by selling a premium product to a small percentage of this user base. As a matter of fact, this business model also exists within social networking sites, for instance with LinkedIn and LinkedIn Premium. References: (1) http://www.freemium.org/what-is-freemium-2/ (2) http://www.cnbc.com/2015/11/06/wholl-be-left-feeling-blue-by-youtube-red.html (3) https://www.entrepreneur.com/article/253511 (4) http://www.cnet.com/how-to/youtube-red-details/ (5) https://www.entrepreneur.com/article/243573 Show less Reply Ophélie Duquesne 27 April 2016 Why did YouTube change his business model from free to freemium? Is this a sustainable solution? The first aim of freemium is to make money by attracting new users. As the largest revenue stream of YouTube is advertising, we could ask ourselves why YouTube should then propose an ad-free service. (1) The main reason is that people are bored with…Read moreWhy did YouTube change his business model from free to freemium? Is this a sustainable solution? The first aim of freemium is to make money by attracting new users. As the largest revenue stream of YouTube is advertising, we could ask ourselves why YouTube should then propose an ad-free service. (1) The main reason is that people are bored with advertising. YouTube users try to find ways to avoid them. There exists several free programs like Adblock to watch videos on YouTube without those annoying ads. For a freemium model to be successful, you need to convert your customers. They need to change their mind about the model. Therefore, there has to be added value to the proposed service. YouTube has to maximize the marketing efficiency to generate excitement to the customers. (2) The product needs to be a quality free product that people want, it has to be digitally duplicated and the reach is supposed to be large. Phil Libin (Evernot) said: “The easiest way to get one million people paying is to get one billion people using”. That’s all the case for YouTube. (3) If the conversion rate is low, it means you offer too much in your free version but a high conversion rate is not necessarily good. (4) Youtube should go a step further in what they offer in their freemium version as only 1% of the content is not available in the free version. Users don’t want to pay a subscription if they can access almost all the content in the free version and use a program to block ads. The distinction between both versions is not clear enough. Speaking of the sustainability of each business model there are pros and cons for each one. A subscription-based model with monthly fees provides a more sustainable revenue source than an advertising model. But you then need a clear distinction between the free and paid offer otherwise, users won’t pay for the freemium version. (5) With an advertising-revenue-based model you can attract more users, which means more advertisers interested in putting their ads on your online service and so more revenue. But this doesn’t generate a direct revenue from your customers and during hard economic times companies will decrease their advertising budget. A subscription-model provides revenue from your customer base and there is no risk of advertising reduction in difficult times. You will always get a stable revenue. But you don’t attract new customers and there is a risk of customer loss. (6) As a conclusion, to choose between one model and the other, it depends on your business and the education of your customers. They need to be able to make a clear distinction between the free and paid version. Subscription-based model won’t become the norm but companies turn more and more to that type of revenue model and rely less on advertising. (1) (3) http://www.freemium.org/wp-content/ebook-101.pdf (2) (4) (5) https://hbr.org/2014/05/making-freemium-work (6) http://smallbusiness.chron.com/advertising-models-vs-subscription-models-70238.html Show less Reply Laurentine Fosséprez 27 April 2016 Freemium model is a combination of free and premium services. Despites, lots of revenues on the Internet provide from advertising, it’s now clear that monthly subscription fees were found to be more sustainable revenues than the incomes from advertising. (1) Moreover, a large part of consumers is tired of the advertising model and the number of adblocking software users is growing…Read moreFreemium model is a combination of free and premium services. Despites, lots of revenues on the Internet provide from advertising, it’s now clear that monthly subscription fees were found to be more sustainable revenues than the incomes from advertising. (1) Moreover, a large part of consumers is tired of the advertising model and the number of adblocking software users is growing up. In the digital media world, freemium has already been successfully implemented for many firms like Spotify, Pandora, etc. Would a freemium version of YouTube benefit as well? In the past article, we talked about user base and conversion rate which are important factors to take in account to implement a freemium strategy. The freemium-based model is valuable if it is still able to generate traffic (1) which it would not be a problem for YouTube by looking to its user base. Concerning the conversation rate, the price of this upgrade version can seems very high to attract subscribers. In fact, a very large conversion rate is not specifically necessary to bring revenues. As Vineet Kumar, assistant professor of marketing at Harvard Business School has found in his research “the best long-term strategy is generally to aim for a moderate conversion rate (most companies’ range from 2% to 5%) coupled with a high volume of traffic.” (1) YouTube Red’s forecasts do not seem to overestimated it, analysts excepted indeed that only 3% of YouTube users will buy subscriptions. That’s far away from Pandora’s 5% and Spotify’s 25% conversion rates but it will however be a growth lever for Google diversifying from search incomes. (2) Especially knowing the few perceived costs to set up the self-serve subscription business, Google has almost nothing to lose with YouTube Red. However, Google has to convince consumers of the added value of its services. To do so, they need to innovate and keep improving their premium services. That’s probably why they have decided to join the war of content creation where Netflix and Amazon are already well advanced. Since the 1Oth February 2016, Youtube Red has started the diffusion of its own exclusive content. (3) Will Youtube Red compete leaders like Netflix in this war of content creation? Probably not, but that’s not the main goal of this freemium version and it will certainly help YouTube Red to attract more consumers. Another issue raised in this article is the extension of freemium-based model to other services. I would like to talk about social networks which are good examples of advertising-based model. The actual advertising revenues model of Facebook is maybe a shortfall knowing that lots of consumers don’t like advertising and moreover some of them are also looking for more safety of their private datas. Social networks like Netropolitan and Ello are trying to use this opportunity (4) but Facebook does not seem to want such changes. Facebook insists on the fact that their services are “free and always will be”. This is posting on their blog and also on their login page. However, it may seem like a contradiction but looking closely to their terms and conditions we could see the sentence “ We do not guarantee that Platform will always be free” This is in fact dedicated to developers and operators of applications and websites like games developers or brand page. (5) Freemium version is not about to happen for end user but is already a future possibility for developers and operators. Such as YouTube Red with its content creators, Facebook has strong bargaining power with them. (1) https://hbr.org/2014/05/making-freemium-work (2) http://qz.com/592514/youtubes-new-paid-service-might-become-googles-big-growth-driver (3) http://www.ariase.com/fr/news/youtube-red-contenus-originaux-svod-article-4077.html (4) http://www.think-progress.com/fr/blog/posts/lere-des-reseaux-sociaux-gratuits-est-elle-finie/ (5) http://www.socmedsean.com/will-facebook-always-be-free-probably-not-for-everyone/ Show less Reply Mélisande Richald 27 April 2016 This article deals with the new service that YouTube has recently launched on its platform ; YouTube Red. Thanks to this new strategic step, the platform has from now onwards entered the Freemium era. First and foremost it is important to understand this new concept which is nowadays playing a key role in businesses. The Freemium is a business model…Read moreThis article deals with the new service that YouTube has recently launched on its platform ; YouTube Red. Thanks to this new strategic step, the platform has from now onwards entered the Freemium era. First and foremost it is important to understand this new concept which is nowadays playing a key role in businesses. The Freemium is a business model combining free and premium services. This means that a large number of users will have access to a core product/service at no cost while a smaller amount of users will pay a subscription fee for a premium service granting access to richer functionalities (1). But, what are the main rationales for companies to launch a freemium service ? Obviously, the first reason is money. Under this business model, firms seize the opportunity to sell complementary products and fetch a better profit. Besides this, freemium is a powerful marketing tool allowing businesses to get known easily and reach more people by distributing free features without having to expand expenditures for ad campaigns or sales force. This undeniably attracts new consumers potentially interested in a future acquisition of a charged subscription. On top of that, freemium is a key to adapt to the fast growing digital world and will doubtlessly allow differentiation of your business (2). It is no surprise that YouTube has recently launched its freemium service consisting in an ad-free subscription. Indeed, being an affiliate of Google, the platform has the adequate funding to try that experience. For years, the number of users hasn’t stopped increasing while expressing their desire for more choices, options and ways to support (5). Thanks to this service, customers will be able to watch videos without being forced to watch an ad beforehand. What’s more, they will have the opportunity to save content and consult it offline which runs against the opinion of Netflix stating that the customer is not looking for that kind of services. Besides this, the user will be able to use various apps at the same time as it will also offer Background Play. What is particular with YouTube’s subscription is that the payment will not only grant access to the premium service of YouTube but also to the streaming music service of Google, Google Play. Thanks to those additional services, YouTube have from now onwards the means to compete with Spotify or even the video streaming giant, Netflix. The revenue generated by the subscriptions will be shared among the right holders and YouTube itself (3). This is, for the creators that accept the system as the one who haven’t signed up for the program will see their video hidden for the platform. However, YouTube is not fearing that phenomenon as no forceful competitor able to provide them with a relative similar offer is available on the market (4). Some experts are being skeptical toward YouTubeRed. In fact, according to Ian Maude, it is difficult to detect how consumers are valuing the alternative to the ad-only model. It is clear that the the costs of the service will have to be more attractive than the cost of sitting through lots of ads. Besides this, Ian Maude is also fearing the size of the audience who will upgrade as this last is accustomed to get free access to a large amount of content (5). This turns out to be a real challenge for YouTube; is the platform’s offer too rich and does it have to cut back in its offer? To make YouTube Red a successful story, the platform has to strike a balance between traffic and paying customers (6). The key to success for YouTube will be to attract enough talented creators to provide its platform with high-quality videos meriting to be paid. Besides this, the customers have to fully understand the premium offer. This can be achieved through means of marketing efforts. Moreover, YouTube has to be aware of Facebook’s next steps into the video sharing. In fact, the social media has recently developed video areas. I believe that YouTube Red is a clever strategic step for the further development of the the platform. Indeed, the company has to keep up with the evolutions in the digital world and respond to the user’s arising needs seeking for personalization and extended services. However, to make it work, YouTube will have to address some issues and be aware of the challenges it incurs. References: (1) http://www.freemium.org/what-is-freemium-2/ (2) http://www.freemium.org/top-9-reasons-freemium/ (3) http://techcrunch.com/2015/10/21/youtube-red/#.4svo6o:vNP9 (4) http://www.ipdigit.eu/2015/11/youtube-turns-freemium/ (5) http://www.bbc.com/news/technology-34596219 (6) https://hbr.org/2014/05/making-freemium-work Show less Reply Jooris Christelle 26 April 2016 YouTube Red arrived on the market in 2015 by offering upgraded version of the well known website YouTube. In exchange of roughly 10$ per month, users can enjoy some benefits which improve their viewing experience than free users don’t have access to. Indeed, YouTube Red allows users to watch videos without any advertising. Besides, it provides the possibility to watch…Read moreYouTube Red arrived on the market in 2015 by offering upgraded version of the well known website YouTube. In exchange of roughly 10$ per month, users can enjoy some benefits which improve their viewing experience than free users don’t have access to. Indeed, YouTube Red allows users to watch videos without any advertising. Besides, it provides the possibility to watch videos offline and to listen videos with the screen off or when the users are in another app. (1) And it also allows users to access to exclusive contents (2) and channels of cinema and television producers and actors. (3) And users will also enjoy of YouTube Gaming, YouTube Music and Google Play Music. (4) The people who don’t want to pay to access to the premium version, can still use the free YouTube and watch freely videos and channels with ads. (1) Then, is the red version of YouTube very attractive for users? It is a clever initiative or additional measures should be put in place in order to improve the red version? One of the biggest problems of YouTube is to convince users to pay the premium version of YouTube. In fact, users are accustomed with the free version which already provides many functionalities. One of the main advantages claimed by YouTube Red is the ads removal. However, several users use ad blockers which block a big part of the ads on this website. In addition, users can skip ads after a few seconds which means that advertising are not very disturbing. Then, we might think that they perhaps don’t really need the “block ad functionality” of YouTube Red. Besides, YouTube Red offers the possibility to watch videos offline but users can already do it by downloading its even if it is illegal. It is also interesting to notice that in the past few years, YouTube has already launched a different paid subscription service which didn’t work because users wasn’t ready to pay for it. (5) In addition, the new version brings concerns to several YouTube users. Indeed some of them disagree this new version because very popular youtubers will go on YouTube Red by leaving the users who cannot afford this premium version. They have the feeling that YouTube has destroyed a community build for years. Besides, they claim that it separates people from each other and several people will stop to use this website. (6) In fact, they are furious to have to pay for almost the same service. (7) Users are not the only ones who are affected. Indeed, in order to provide the most attractive offer as possible, YouTube forces some of its creators, who earn money from ads, to accept to put their videos on YouTube Red. If they don’t accept, their videos will be not accessible by anyone. Accepting this offer has a big advantage for us because it provides them another source of revenue streams (8). According to YouTube, the majority of its partners, which represents 99% of the website watched content, have accepted the YouTube Red terms. (9) Although several artists accepted it, some of them had to leave the platform, as ESPN (sportive channel) for instance because ESPN has some contracts with other diffusers which forbid them to sell its videos via subscriptions systems. (9) This new version of YouTube impacts then a big part of the youtubers. These elements seem to strongly throw spanners in the works of the YouTube Red’s success. But according to Robert Kyncl, the chief of the commercial business of YouTube, people buy more and more this kind of subscriptions that allow users to benefit from content without advertising. (10) Besides, YouTube count on exclusive content to attract as much people as possible. (10) Several YouTube stars which have millions of subscribers to their channels, have already accepted to dedicated their upcoming videos to YouTube Red. (10) YouTube claims that youtubers have been asking them more for years, they want more choices when they view their preferred content, and they expect more ways to support their favourite creators and they want the option to watch their favourite videos without interruptions. (8) Besides, creators apparently also asked for subscription services on YouTube. It seems then that YouTube Red answers to a real need and these previous pointed elements let me think that YouTube Red might work well. However, the creation of original and innovative contents needs big investments and the YouTube Red’s success is not guaranteed (10). It is then a risky initiative. Because YouTube Red has only a few month, it is difficult to judge if other measures have to be put in place to help its launching. For now, all measures taken seem to be adapted and great. But is sure is that users which asked for an high version of YouTube will certainly buy it and it will also attract the fans of the creators who let the access to their videos only on YouTube Red. Besides, all youtubers will certainly not buy this version because it might be too costly and the advantages of the red version could not attract everyone. Then, we will see if the quantity of high quality buyers will be high enough or insignificant. It is also interesting to look at the future of the revenue model of the numeric medias. Will they always be paid by ads or subscription model will take over it? According to me, these two models could always exist. Indeed, brands will always need advertising to be known. For a few years, Internet is an important way to touch their targets and especially through the social media and through websites which have many views per day as YouTube for instance. We can notice that there exist different ways of advertising revenues as cost per click or cost per mille for example (11). The rules in the web-advertising field could change or evolve but this advertising will certainly always exist because brands enjoy several benefits to invest in it. Indeed, these ads increase the brand awareness and the purchase intentions of the consumers. (12) However, only the websites which benefit from many views per day can only put in place this kind of revenue model. Indeed, the less seen websites can usually not survive with only the advertising revenue model. (11) For the subscriptions model, there will always have people who will agree to pay more to obtain high quality services if it worths it. Of course, some high quality services or products attract more people than other ones. But it will always have people who have more money and who like to have better and innovative products. In general, I think that these two models can also survive. References: (1) http://www.cnet.com/how-to/youtube-red-details/ (2) http://www.nextinpact.com/news/97095-youtube-red-tout-ce-quil-faut-savoir-offre-sans-publicite.htm (3) http://www.lesmobiles.com/actualite/19778-youtube-red-10-dollars-par-mois-pour-quoi-exactement.html (4) http://www.journaldugeek.com/2015/10/22/youtube-red-la-version-payante-de-youtube-mais-sans-publicite/ (5) http://www.tubefilter.com/2015/10/23/youtube-red-myths-subscription/ (6) https://www.change.org/p/youtube-stop-youtube-red (7) http://www.latinone.com/articles/26097/20151023/youtube-red-review-the-pros-cons-of-subscribing.htm (8) https://support.google.com/youtube/answer/6306276?hl=en (9) http://www.igen.fr/ailleurs/2015/10/youtube-red-fache-et-appauvrit-les-createurs-de-contenus-maj-93604 (10) http://www.lesinrocks.com/2015/10/22/web/youtube-lance-red-sa-nouvelle-version-payante-11782786/ (11) E-marketing course (Anne-Cécile Jeandrain) (12) Manchanda, P., Dubé, J., Goh, K., Chinyagunta, P. (2006). The effect of Banner Advertising on Internet Purchasing. Journal of Marketing Research. 43(1), 98-108 Show less Reply Paul Belleflamme 27 April 2016 Very nice analysis! Verschoore Quentin 26 April 2016 Before entering in the analysis of my research content, I firstly wanted to give my personal opinion on this issue. In order to assess what will be the common revenue model of such platforms in a near future as well as in the coming decades we have to consider 2 questions: - Is the market in question subject to high competition? - Is the current…Read moreBefore entering in the analysis of my research content, I firstly wanted to give my personal opinion on this issue. In order to assess what will be the common revenue model of such platforms in a near future as well as in the coming decades we have to consider 2 questions: – Is the market in question subject to high competition? – Is the current revenue model sustainable and profitable? In my opinion, if there were a lot of competitors within the market the reached balance will be such that it would allow digital content providers to break even through charging a price to advertisers allowing them to cover their costs. This way, the revenue stream would be sustainable for the most cost efficient companies. Moreover, a freemium strategy would be difficult to implement and would require a considerable added value for the subscribers who would have to pay, otherwise they would turn to their competitors. Nevertheless, it seems not to be the case of Youtube who doesn’t face a lot of competition. However, such a strategy could also be dangerous and imply the emergence of competitors and the entry of new players in the market. Therefore, in order not to lose their market shares, the additional service offered by the freemium account would have to constitute a real added value in such a way that the price they would be willing to pay would have to be equal or greater to the price they actually would have to pay. Concerning Youtube red, I am convinced that there is a real potential to exploit, particularly with respect to the offline mode, but as far as I am concerned, the service offered doesn’t sufficiently distinguish from the existing ones to justify a price of 10$/month. Moreover, as explained in the text, the criterion about adfree videos is not really relevant since most of Internet users use ad-blocking extension to avoid excessive advertising. My researches allowed me to get more familiar with this new type of revenue stream and to analyse its sustainability. In fact the term “freemium” arises from the combination of “free” and “premium”. Such a subscription-based revenue model offers basic features for free while giving access to richer functionality in exchange of subscription fees. By offering free features, this strategy constitutes a potent marketing tool while allowing enterprises to make money, benefiting from the monthly subscription fees. This model has rapidly grown since its appearance a couple of years ago in such a way that it has expanded to websites such as Dropbox and Skype. The monthly subscription fees typically charged are proving to be a more sustainable source of revenue than the advertising model prevalent among online firms in the early 2000s. Moreover, the advertising-revenue-based model increasingly suffers from ad-blocking tools. For all these reasons, the “freemium” model is expected to spread like wildfire in the coming years, especially with regard to Internet start-ups and smartphone app developers, for whom this business model is particularly attractive, allowing them to make themselves known while making money with the premium version. Concerning the social medias, the “freemium” business model has already extended to LinkedIn. Most of users use the website freely in order to build professional relationships, but they could also access to a premium version. In fact LinkedIn offers two main groups of premiumOFFERINGS which are “talent solutions” and “premium subscriptions”. Talent solutions primarily service those recruitment professionals that need to find the best candidates. Premium subscription caters to those members that use linkedin for a variety of other purposes, such as sales and lead generation. On an indicative basis, the total revenue of LinkedIn for 2013 was divided into three part as follows: – Premium subscriptions account for 307 Million (20%). – Marketing solutions account for 365 million (24%) – Talent solutions account for 857 million (56%) A relevant thing to highlight arises from the fact that freemium models induce considerable network effects. Indeed each new free member increases the value for other members, free and premium. “Giving a business model where the value of the free users comes not only form the potential to upgrade or attract new users. But also from the additional value contributed to the network of professional resumes.” With respect to facebook, its access is free for the users and they claim that it will remain unchanged. Their business model is completely based on advertising. However, regarding the existence of ad-blocking tools, if they want to remain highly profitable while being free for users, they should maybe try to find other way to make money in the future. Sources: http://www.freemium.org/linkedin/ http://fr.slideshare.net/oukearts/10-new-business-models-for-this-decade https://hbr.org/2014/05/making-freemium-work http://speakinginbytes.com/2014/01/building-sustainable-business-freemium/ Show less Reply Gregory Merguerian 26 April 2016 In my opinion, the conversion rate of usual users to Youtube Red users will be very insignificant in regards to the Youtube community for several reasons. First, it’s too expensive for what consumers get, I don’t see people paying 10$ a month for such an offer and I’ll explain why. People are used to these ads before watching their videos…Read moreIn my opinion, the conversion rate of usual users to Youtube Red users will be very insignificant in regards to the Youtube community for several reasons. First, it’s too expensive for what consumers get, I don’t see people paying 10$ a month for such an offer and I’ll explain why. People are used to these ads before watching their videos and most of the time ads can be shortened by clicking on a small link after a couple seconds. On top of that, most people use Adblockers that reduce even more the hassle of ads. Second, it’s not a good idea to force content creators to upload original videos (3). These people have the habit of being completely free in doing whatever they want to do, if Youtube starts imposing some rules this freedom will disappear (1). Moreover, youtubers will see their revenues from ads decrease as well if people start subscribing to Youtube red. Considering that these people leave from these ads, this may not be the smartest move. What could Youtube do is separate its different offers, of course giving a Google Play music subscription is great to enlarge its customer base but does everybody need this subscription? Not really, not to mention that a considerable share of customers is made of Iphone users and most of the time they do not use the Google services despite Youtube of course. Giving the ad free solution for a depreciated price could be interesting for people who are really bothered by the ads. Offering original content could also be interesting but making people pay for it is not in my opinion the right solution. Concerning the second part of the question. In my opinion, we are already paying for digital content by giving away our precious info to companies (2). These can earn a lot of money by selling our data. Therefore, I believe that this tendency will increase even more with the rising trend of big data. Concerning the revenue model, I don’t think it will be either an advertising-revenue based or subscription-based, both will continue to exist since the whole internet population will never go for only one type of offer. There will always be people who prefer not to pay and watch some ads and the other group who prefers to pay in order to get a more exclusive offer. But it is important to mention that subscription based models such as Netflix (5) have had an impressive growth over the past years. People find it very convenient to pay a monthly fee in order to get unlimited TV shows and movies. Such models can work but these have to offer something very special in order for them to work. What exists too is micropayment (4), it means paying a fee of under 10$. A good example of this type of model is Itunes, people buy songs for under a dollar. It has the advantage of promoting quality over quantity but one of its inconvenient is that transaction costs for merchant are high for small purchases. This option is good for services like music and online newspapers for example. 1. http://www.makeuseof.com/tag/4-reasons-youtube-red-bad-youtube-community/ 2. http://adage.com/article/guest-columnists/t/301513/ 3. http://techcrunch.com/2015/10/21/an-offer-creators-cant-refuse/#.4svo6o:sKTe 4. http://www.subscriptioninsider.com/public/Micropayments-The-Hot-New-Way-to-Pay-for-Digital-Content.cfm 5. https://www.quora.com/Why-does-Netflix-video-streaming-work-so-well Show less Reply Lyse Saintjean 26 April 2016 I don’t know if it’s smart but it follows the move like several important platforms like Spotify or Skype. The freemium strategy is a new strategy used on the mainly on the Internet. This strategy combines "“free” and “premium” consumption in association with a product or service. In a nutshell, the model involves giving away for free a certain level…Read moreI don’t know if it’s smart but it follows the move like several important platforms like Spotify or Skype. The freemium strategy is a new strategy used on the mainly on the Internet. This strategy combines ““free” and “premium” consumption in association with a product or service. In a nutshell, the model involves giving away for free a certain level or type of consumption while making money on premium consumption” (1). But in the whole YouTube regroups the some of the mainly characteristics to answer at the freemium business model. According Sevilla (2012), the product has to touch a lot of users (by millions)(3); with more than one billion of users, YouTube has enough to touch the most users possible with YouTube Red. The users must to be loyal for have enough luck to convert them in paying users; with all the subscription to the YouTube channels and with the increase of watching time related by the statistics of YouTube (3), it full this condition too. But one risk is that YouTube decreases the quality of its free content, like Spotify did (2), to focus its efforts on the quality of the premium content. This would be a big mistake because the success of YouTube and the base model of this business is the freedom of watching as much video that you want without paid. If the quality of free content decreases, it isn’t sure that the users want to pay for other contents. The quality of the free content cannot change, if not this changes all the offer of YouTube and its concept. If is the case, this create a discrimination between the users who pay and those who don’t pay. Also paid for content, which has always being free, is a little confusing for the users of YouTube. In fact, they go past to the status “users” from the status “consumers”. One more time, this changes the offer of YouTube and in a way, the behavior of the users. Otherwise, with YouTube Red, the creation of creative and exclusive content by famous YouTubers is necessary to attract users in this model. The influence of the big YouTubers is huge on the people and a lot of users will be ready to follow them in the premium offer to have access to their contents. But in force the YouTubers to sign this model is a little risky. Are they ready to provide enough content with high quality to answer at the demand? Even more if they don’t completely agree with the model or convinced by it. In the future, if the subscription becomes the norm to access to digital content, I think that this could be create a huge trouble of equity. As we have seen in class with the “net neutrality” module, Internet is submitted to three no discrimination rules based on data source, on data destination and on the type of data. If you must pay to have access at digital content, some people could not pay. Everybody has not the financial means to subscribe at all the platforms that they want use. This creates a discrimination based on the type of data. These people could only have access to lower quality of data or maybe have not access to some data. I’m against this model if it becomes the norm. And even more if it is extended to the social networking sites or services that are free-to-use. One more time, this will create discrimination and private some people of its means of communication. Now, most of the free-to-use services are profitable (mainly thanks to the advertising) so the only reason to change of business model is to generate more revenues. This business model is only advantageous for the firms. I cannot see advantages enough important and profitable for the users. For me, the main advantage of Internet and the most of websites is that all is free and every people in the world have access to all the information and all the platforms that they want to learn, communicate, for entertainment and so on. Source : (1) Niculescu M. and Wu D.J. (2011). When should software firms commercialize new products via freemium business models ? Online https://www.misrc.umn.edu/workshops/2011/fall/MariusFlorinNiculescu_2.pdf (2) Sevilla A. (2011/2012). Le business model Freemium est-il applicable et viable hors de l’économie numérique ? Online http://institut-innovation-competitivite.eu/sites/default/files/biblio/memoire_antoine_sevilla_0.pdf & (3) https://www.youtube.com/yt/press/fr/statistics.html (4) http://techcrunch.com/2015/10/21/youtube-red/#.4svo6o:vNP9 (5) http://techcrunch.com/2015/10/21/an-offer-creators-cant-refuse/#.4svo6o:sKTe Show less Reply Fournier 26 April 2016 It seems that after more than one year, Youtube red is a success. This extension of Youtube allows subscribers to have a broader access to additional functionalities such as the viewing of videos without an Internet connection or the opportunity to avoid advertisements. (7) It seems quite counterintuitive that people are ready to pay for Youtube Red. But “the Google-owned company…Read moreIt seems that after more than one year, Youtube red is a success. This extension of Youtube allows subscribers to have a broader access to additional functionalities such as the viewing of videos without an Internet connection or the opportunity to avoid advertisements. (7) It seems quite counterintuitive that people are ready to pay for Youtube Red. But “the Google-owned company thinks that many viewers would be willing to pay a few dollars a month for ad-free watching and listening.” (12) Indeed, by making this change, Youtube is developing a new way to make money. The majority of revenue Youtube was making was via advertising. Now it builds an extension and an app that is subscription-based. That’s a new way to earn money. In fact, “Red was started based partly on feedback from customers who said they would pay to avoid the ads.” (13) Advertising isn’t still the only revenue on which youtube can count on. According to recent study by PageFair, it exists now ways to block ads. And that has a cost for business supported by advertising-based revenue structure. The global ad blocking is growing heavily. Moving from 21M software’s users to 181M in 5 years. (2) This is the first reason why it seems to be a smart move from Youtube to move from a almost complete advertising-based revenue model to a balanced subscription-based revenue model. Moreover, Youtube represents 60% of the videos watched online according to Nielsen. That’s why it puts Youtube on a successfully position to benefit from this trend. Indeed advertisements are more and more viewed online and Youtube Red permits to watch youtube videos straight on TV. But here, Youtube Red is meeting new competitors such as Netflix for videos on TV and Spotify for their partnership with their subscription to Google Play Music. (1) (4) However it seems to me that it could be noticeable to add an additional step to make it work more efficiently. Indeed, 99% of the content will be still available even without subscribing to Youtube Red. By the way, it was nearly a forced shift for the creators of videos or like they said : “An offer they couldn’t refuse”. Creators who refuse to sign in this new subscription model should remove their videos from Youtube. Indeed it looks like an ultimatum more than anything else. Maybe it seems to be a little abrupt as a decision but obviously, 99% of content consumed on Youtube will be still available. But this affects only the creators. So why should we pay if we can still access 99% of the content? (9) According to me, even if there are additional functionalities, it is not enough to shift the usual mind of a Youtube’s user who is not accustomed to pay. The first thing to do, and this is the additional step, would be to execute a marketing “education strategy” in order to explain to user why it is important to pay and what are their principal benefits. Indeed you make something free becoming something charged. Indeed it seems to work in the US but European public is also ready to pay for that? Youtube should show to public that the Red experience is worthy. Youtube Red doesn’t reside in the only one to become a subscription-revenue-based model. Netflix can’t be really compared to Youtube Red but it is lies in an example of a subscription-based model. In a much broader way, Advertising on Internet is growing but way to block it also. It means that it’s time for advertising-based revenue model to shift from this one to another one. However, I don’t think it’s going to be the norm. Still numerous companies work without living from advertising revenue and for now, they don’t really need to shift. Taking the example of Ebay that takes a commission on sales for example. It proves that it is possible to invent new and different revenue models. Amazon, for example, is also offering service like delivering. This way, the consumer is paying for the good but also for its delivering. What if Facebook begins to charge minutes of connection to your profile? Or if Twitter begins to charge each tweet you make? But thinking of social networking sites such as Facebook that is free for now and claims to stay this way. It becomes also possible to block ads of your Facebook Page. That’s something they really need to care about. In my opinion, it doesn’t mean that Facebook needs to shift to a subscription-based model but needs to innovate in order to find new way to earn money. The subscription isn’t the only way to achieve it. Indeed, Facebook’s revenues were composed at 92,2% from advertising revenue and 7,8% from payments and other fees. (14) Maybe Facebook needs to rebalance this because it counts too much on advertising revenues. Sources: 1. http://www.clubic.com/pro/entreprises/google/actualite-762360-pourquoi-youtube-doucement-train-devenir-payant.html 2. http://downloads.pagefair.com/reports/2015_report-the_cost_of_ad_blocking.pdf 3. https://www.entrepreneur.com/article/253511 4. http://www.tubefilter.com/2015/12/01/youtube-red-app-store-revenue/ 5. http://www.tubefilter.com/2015/10/23/youtube-red-myths-subscription/ 6. http://youtubecreator.blogspot.be/2015/10/meet-youtube-red-ultimate-youtube_37.html 7. http://www.cnet.com/how-to/youtube-red-details/ 8. http://www.ipdigit.eu/2015/03/business-models-for-digital-goods-video-games-free-to-play-games/ 9. http://techcrunch.com/2015/10/21/an-offer-creators-cant-refuse/#.4svo6o:sKTe 10. http://www.wsj.com/articles/SB10001424052702303851804579558091795473048 11. http://www.ipdigit.eu/2014/02/prezi-a-successful-freemium-model/ 12. Ward-Bailey, J,. (2015). With Youtube Red, Google pivots from ads to paid subscriptions. The Christian Science Monitor. 13. Weiss-Todd, R,. (2015). Youtube wants to License TV Shows, Movies for its Red Services. 14. https://www.quora.com/How-does-Facebook-make-money Show less Reply Léopold Van Oost 25 April 2016 This article presents the new freemium service of Youtube, the Google subsidiary for online video broadcast. This service is called Youtube Red and the subscription fee is $ 9,99 per month. To understand this situation, we need to know what is the business model of Google and its subsidiaries. Google offers services to people and, in exchange, sells time and space…Read moreThis article presents the new freemium service of Youtube, the Google subsidiary for online video broadcast. This service is called Youtube Red and the subscription fee is $ 9,99 per month. To understand this situation, we need to know what is the business model of Google and its subsidiaries. Google offers services to people and, in exchange, sells time and space for advertisers. So users can enjoy a free service, such as Internet research or playing a video, but they have to see advertisement during their surfing session. There are different types of ads on Youtube (1): the Display Ad that is on the right of the video and that is not very intrusive for the user. There is the Overlay Ad that is an overlay on the bottom of the video, it is a bit more intrusive but it is easily skippable. There is the Skippable Video Ad, it is a video that the user can skip after 5 seconds and it is already quite intrusive for the user. Finally, there is the Non-Skippable Video Ad that can last up to 30 seconds and that is very intrusive for the user. For intensive users of Youtube, those two last categories of ads represent a big loss of time and can be extremely boring. That is why some developers created the web-extension AdBlock. It is a license free software (even if you can donate some money to help them), easy to install and to monitor, which simply block ads (2). The software has been downloaded more that 300 million times and is highly appreciated by the users (3). It is quite obvious that this is a real threat for Youtube, by using AdBlock people do not give their time for ads and Google does not earn anything on those users (as mentioned in the article, the expected loss for 2016 is around $ 40 billion). So, I believe that a move from Youtube is necessary for the future of the company. But, I am not sure that the current strategy, as presented in the article, will be sufficiently efficient. Indeed, AdBlock is free whereas Youtube Red is not. It is said in the article that they will do exclusive content by taking some famous “Youtubers” on board. They are currently making “series” with some famous content creators as main personages (4). But the problem is that those creators are making the same kind of videos on their channel (and those are free access). I think that there are not enough incentives for users to pay for Youtube Red because they can have the same kind of content for free and without advertisements if they use AdBlock. I believe that Google should push the concept of Youtube Red a step further. Maybe they should learn from Netflix: create real series and movies directed and acted by experienced people and by “Youtubers”. They have to create very high quality videos that you cannot find on the free part of Youtube. For the second part of the question and to conclude this comment, my opinion is that the freemium is going to become the standard in the way to use Internet. The advertising-revenue-based model is suffering from AdBlock and other software’s used by surfers. But, to be effective, the paying part of the freemium has to give something more to the users. The best example is LinkedIn. The social media is free to use but, if you want to have access to some useful tools, you have to pay for LinkedIn Premium (5). Ressources: (1) https://support.google.com/youtube/answer/2467968?hl=en, consulted on April 24, 2016. (2) https://getadblock.com, consulted on April 24, 2016. (3) http://www.frenchweb.fr/adblock-plus-ce-quils-pretendent-faire-et-ce-quils-font-reellement/188871, consulted on April 24, 2016. (4) https://www.youtube.com/channel/UCqVDpXKLmKeBU_yyt_QkItQ, consulted on April 24, 2016. (5) https://premium.linkedin.com, consulted on April 24, 2016. Show less Reply Xoan-roi Gomez Marti 23 April 2016 Youtube red is offering tree new features: "Ad-free and still supporting creators, enjoy videos offline, switch app and keep playing" for 9.99$/month. As enjoying youtube without ads is already possible by downloading AdBlock we only remain with two real upgrades that in my opinion do not worth 9.99$ a month. The new content that Red will provide has to worth…Read moreYoutube red is offering tree new features: “Ad-free and still supporting creators, enjoy videos offline, switch app and keep playing” for 9.99$/month. As enjoying youtube without ads is already possible by downloading AdBlock we only remain with two real upgrades that in my opinion do not worth 9.99$ a month. The new content that Red will provide has to worth the price. Will it start to compete with Netflix and Spotify (both available for 9.99$/month) by offering the possibility to watch movies and series and to lessen to streaming music? If they do provide this content for the same price that others provide a single service they will be able to capture a significant market share and increase their conversion rate. The future seems to bee uncertain about how we are going to pay for digital media content. Nevertheless, we can observe that in order to capture a significant base of users the best strategy for a platform is to provide its content for free. Therefore, they have to find third parties who are interested in paying to avert their product to this base of users. After if the platform is successful it could “evolve” and propose a subscription-based model. More than a dichotomy between two models fighting to provide a same digital content I see it as a strategy that a mass media can put in place when the numbers of users are sufficient in order to increase benefits in order to compete with new successful players as it seem to be the case for You tube Red. https://www.youtube.com/watch?time_continue=32&v=YL9RetC0ook Show less Reply Guillaume Van Lier 22 April 2016 YouTube Red is a monthly-paid subscription service by YouTube, only available in the United States at the moment. It provides consumers advertising-free streaming of videos hosted by the service, offline and background playback of videos on mobile devices. To do so, YouTube Red has contributed with major networks and notable YouTube producers and personalities to offer "YouTube Red Originals", movies…Read moreYouTube Red is a monthly-paid subscription service by YouTube, only available in the United States at the moment. It provides consumers advertising-free streaming of videos hosted by the service, offline and background playback of videos on mobile devices. To do so, YouTube Red has contributed with major networks and notable YouTube producers and personalities to offer “YouTube Red Originals”, movies and television shows exclusively earmark to those who have paid the subscription (also called Red members). How do content creators earn money in a subscription-based model like YouTube Red? YouTube has had to seek permission from rights holders and creators to allow their content not to have advertising. In exchange, these partners would receive a share of the total revenue from subscriptions depending on the number of views on their videos. Online media sites and digital businesses have 3 possibilities to generate revenue: advertising, subscriptions or a combination of both. An advertising-revenue-based business model offers free content/services to customers and does advertising to make money (such as Facebook for example). A subscription-based model such as YouTube Red charges users for services or content. And obviously, both approaches have pros and cons (developed below). ADVERTISING-BASED MODEL STRENGTHS: The main benefit is that you can offer free services or content to attract users. If a business can provide services or products similar to subscription-based competitors in terms of quality and accessibility, it will be able to attract a sizable customer base. Therefore, it could be attractive for advertisers who want to pay to reach a large amount of people or a specific type of audience. ADVERTISING-BASED MODEL WEAKNESSES: A disadvantage here is that you don’t generate direct revenue from a large or active customer base. Furthermore, firms tend to reduce budget dedicated to advertising during tough economic times or industry downturns. Hence, if partners/sponsors go through a difficult period, there will be a risk of revenue reductions. SUBSCRIPTION-BASED MODEL STRENGTHS: Here, the principal advantage is that you can generate revenue from an engaged customer base. Plus, the quality of your readers is higher, because they have shown they are interested enough in your content to pay for it. Additionally, on the contrary to the ad-based model, if you make money from customers, you don’t face the risks of advertising reduction from economic downturns. Moreover, subscriptions are generally made on monthly, quarterly or annual bases so it provides more stable revenue than selling advertising only on a monthly basis. Therefore, you have more flexibility: subscriptions allow you as a company to plan resources and predict revenue. SUBSCRIPTION-BASED MODEL WEAKNESSES: Firstly, when you charge for your content, you lose casual readers and visitors, as well as those who are interested. And if you don’t succeed in attracting customers, you will not generate revenue but not having a large audience also don’t appeal to advertisers. Secondly, subscription-based businesses risk facing for higher customer loss than free services. Finally, you need an efficient and effective system to manage customer payments and secure data collection to protect customer privacy. Consumers’ behaviour has changed and more and more people favour access, simplicity, rapidity and convenience and want customised set of goods. Therefore, subscription-based models encourage consumers to buy more consistently so this kind of businesses seems to be an optimal investment in the domain of e-commerce. Therefore, given all these weaknesses and strengths on both sides, we cannot say a model is better or more sustainable than the other. The best solution seems to be a combination of ads and subscriptions, which may protect against business fluctuation. Nowadays, most companies operate on a “freemium” model, that is to say subscriptions operate beside an advertising business. So yes, given the changing customers’ behaviour explained above, we could say that YouTube has made a smart move by becoming freemium. But according to CEO Susan Wojcicki, YouTube will never become a pure subscription-based model: “If you look at media over time, most of them have both ads and subscription services. YouTube right now is ad-supported, which is great because it has enabled us to scale to a billion users, but there’s going to be a point where people don’t want to see the ads. But if YouTube ever moved away from its ad-supported model, it would lose millions of users in the process. I can’t imagine a realistic situation where that sort of change makes sense.” However, only huge platforms can afford to experiment since they already have huge user bases. “Remember, the subscribers numbers don’t have to be enormous. Today, everybody likes to talk in billions – there are a billion people on YouTube. Netflix has almost 75 million global subscribers – that’s an enormous number, but it pales in comparison to a billion. If YouTube can get a fraction of its audience to pay for YouTube Red, it’ll be a success”. Therefore, they could be crucial actors to lead larger public used to subscriptions as a new kind of norm. Could this phenomenon extend to ad-based model such as social networks? The answer seems to be positive since it already exists, even if it’s not very developed for the moment. Effectively, new social networks such as the followings are trying to find a different economic model. – App.net, also called “the paying Twitter”, promise to sell their product, not their users and will never use personal data for commercial purposes. – Pheed: “It’s based on a simple fact: the most followed accounts on Facebook and Twitter are celebrity accounts. Instead of posting and sharing statuses, videos or photos for free, Pheed wants them to make their fans pay and then give them back half the profits”. – Diaspora, the free project: anyone can create their own ad-free social network, with the guarantee that their data would never be sold to advertisers. Diaspora was presented as a Facebook killer, but it is actually a program that allows people to create small and independent social networks. Unfortunately, Diaspora has had many problems and was not sustainable. Through Diaspora’s story, we can see how difficult it is to offer an alternative to the big ad-based social networks and thinking about a complete shift from ad-based to subscription-based model for social networks seems quite utopian at this time. SOURCES: 1. http://digiday.com/platforms/watch-free-go-red-youtubes-long-term-plan-get-people-pay/ 2. http://smallbusiness.chron.com/advertising-models-vs-subscription-models-70238.html 3. http://uk.businessinsider.com/subscriptions-are-enjoying-a-new-prominence-as-a-revenue-engine-for-digital-content-and-apps-2015-5?r=US&IR=T 4. http://www.tubefilter.com/2015/10/23/youtube-red-myths-subscription/ 5. http://www.wired.com/2015/11/youtube-reds-subscriptions-might-just-mean-a-better-youtube-for-everyone/ 6. http://yourbusiness.azcentral.com/advertising-models-vs-subscription-models-20956.html 7. https://en.wikipedia.org/wiki/YouTube_Red 8. https://www.entrepreneur.com/article/243573 9. http://www.worldcrunch.com/culture-society/can-these-alternative-ad-free-social-networks-oust-facebook-and-twitter-/pheed-diaspora-app.net-advertisement-data/c3s10389/ Show less Reply Paul Belleflamme 27 April 2016 Very thorough, thanks. Leave a Reply Cancel replyYour email address will not be published. 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