YouTube: The Future Monopoly
As music videos, video game reports, and online video logs become more and more prominent in today’s world, YouTube has found new opportunities to make even more money. They have added several new features to their site including up to 60 fps videos, larger video screen, and a new subscription service that bypasses the ads. As great as all of this may sound, Youtube is only trying to make more money than they have. Without this subscription service, YouTube is already making over 10K every minute, more than 5 billion a year. I can understand that YouTube simply wants to compete with other music services that have subscriptions, such as Rhapsody, Soundcloud, Spotify, and Pandora. However, these other services offer the same deal to every artist that wishes to put music on their site.
To bring higher per-song royalties, the music industry has been urging YouTube to launch a subscription service such as the ones Spotify, Rhapsody and Rdio offer, in which they charge users a monthly fee to play an unlimited amount of music. The company is now doing just that, and 95% of its label partners have joined the new service, including all three major record companies (Universal, Sony, and Warner). However there are some smaller labels and notable artists that have been refusing to sign, such as the well known Adele, Arctic Monkeys, and Radiohead. In order not to prevent competition between the current free service and the new subscription-based one, YouTube told these labels and artists that they will take down their music videos and no longer provide a space for advertiser-supported uploads. Basically, if fans upload videos using these labels’ recordings, the labels will be able to ask YouTube only to remove them, not monetize them. Therefore, it’s not only effecting the artists themselves but it hurts the fans who want to make lyric videos and covers of their favorite songs. There is no need to pay for something that has been free for years.
"YouTube is no longer an upstart in a crowded market; it’s a dominant player whose decisions have enormous consequences for its users." -LA Times
Obtaining Other Video Services
Recently, YouTube has made a new purchase for one billion dollars. The popular video game live streaming website, Twitch, has given in under the pressure and sold out to YouTube. Now, YouTube has this as a live streaming site that has already made over $35 million since 2011. I can only assume that with their new subscription service, they will soon be charging people to stream their video games live. And then they’ll be charging people to watch those live video streams. You may not think that watching video games is all that popular and it cannot make too much money, but more than 1 million people broadcast their playing every month, and nearly 45 million people watch these broadcasts each month. With YouTube’s new purchase, I can see them taking over the live streaming services completely and knocking groups like UStream and Justin.tv out of the running.
On top of jumping on the band wagon of live streams, YouTube is also currently developing their own sort of Netflix or Hulu. They call this new project “YouTube Leanback”. This new project is focusing on the idea of watching YouTube the same way you watch TV. No mouse movements. No faulty keystrokes. YouTube simply makes a video feed based off videos they think one would enjoy, and they play a constant stream of YouTube videos surrounding that theme. They will also be working with Facebook to make the video feed focus on friends’ videos that they’ve been watching. Their idea is that one can “lean back” and enjoy their viewing rather than searching a new video every 4 or 5 minutes. However, this will likely also be a part of their subscription service as people will be renting videos and feeds to watch on their feed. There is no need for yet another money-making scam, when we could just as easily click a mouse and enjoy the videos the same way.
YouTube has also come up with another way to make money. They offer fans the opportunity to “tip” their favorite YouTube video makers, in addition to the money that most the famous YouTubers already make. The company is saying that the audience and fund their favorite channel creators $1-$500 dollars at any time for any reason. In addition to allowing viewers to donate to these channels, YouTube is also being so kind to take 5% of all these funds and put it into their own pocket in addition to flat fee they charge the channel creator of 21 cents. I know it doesn’t seem like much, but in due time, this Fan Funding could become huge (much like the already popular KickStarter or IndieGoGo) and could make YouTube a lot of money. With YouTube’s refusal to work with indie labels, more and more people will be inclined to support these indie artists and possibly choose to donate towards their channel, without realizing they are still supporting the greediness of YouTube.
YouTube has also come up with another way to make money. They offer fans the opportunity to “tip” their favorite YouTube video makers, in addition to the money that most the famous YouTubers already make. The company is saying that the audience and fund their favorite channel creators $1-$500 dollars at any time for any reason. In addition to allowing viewers to donate to these channels, YouTube is also being so kind to take 5% of all these funds and put it into their own pocket in addition to flat fee they charge the channel creator of 21 cents. I know it doesn’t seem like much, but in due time, this Fan Funding could become huge (much like the already popular KickStarter or IndieGoGo) and could make YouTube a lot of money. With YouTube’s refusal to work with indie labels, more and more people will be inclined to support these indie artists and possibly choose to donate towards their channel, without realizing they are still supporting the greediness of YouTube.
Now, I’m not necessarily saying that YouTube is the root of all evil. I just want to make people aware of the dangers if we keep giving everything to YouTube. They have so much already, and they have so much potential to make so much more money. All in all, I can say nothing more than keep a keen eye on YouTube, stay informed and be ready to run when they take over the Internet.
Sources:
http://mashable.com/2014/05/19/youtube-twitch-gaming/
http://time.com/2934093/youtube-crowdfunding/
http://m.entrepreneur.com/article/235235
http://www.cnet.com/news/youtube-leaked-contract-hits-off-notes-for-indie-labels/#ftag=CADf328eec
http://www.huffingtonpost.com/2014/06/23/youtube-indie-artists-subscription-deal_n_5522515.html?ir=Technology&utm_hp_ref=technology
http://www.latimes.com/opinion/editorials/la-ed-youtube-music-service-20140622-story.html
http://www.cnet.com/news/youtube-tries-for-the-tv-again-with-leanback/
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