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YouTube is launching a paid subscription service....WHAT DOES IT ALL MEAN
Hank: It's hankschannel! Hello! So you're joining me here on my couch because YouTube's launching a paid subscription version of YouTube, and people are confused about it. Are they confused about it because YouTube is bad at communicating this stuff or because it's just confusing and they're doing their best? Maybe a little bit of both. I've got my phone out, I'm gonna answer some questions from Twitter about this, but first let's talk about what it is.

It's YouTube, nothing changes for the viewer unless you as a viewer decide to pay $9.99 per month and then, something changes. The things that change are that this ad goes away and this ad goes away and the pre-roll ad goes away, and you just get YouTube without any ads, which I am totally in favor of, like, I like that. I wish it was cheaper than $9.99 a month, doesn't seem to need to be that expensive to me, but I'm... maybe there's a reason that I don't know about why it has to be that expensive, but I like it. I'm gonna sign up, I watch a lot of YouTube videos and I don't like watching advertising.

You also get a couple other perks. You get streaming service, music, like YouTube music streaming service. I don't know exactly how this is gonna work, what it's gonna look like, the launch is, I think, next week, so we'll probably get to find out then. You can watch videos in the background on your phone, so like, you can be watching a video and it'll keep playing the sound if you go and do something else on your phone, if you text someone, you can continue listening to the music or the TED Talk that you're listening to or whatever. You can also download stuff onto your phone for temporary use, if you're going on a plane or a train, and you also are going to get access to some "exclusive YouTuber content".

Now, this isn't anything that is currently being produced by YouTubers, but the idea is it's funded content that YouTube is paying for, that's sort of more TV-like but not TV, like. Basically, I'm interested in this exclusive content, because it says this is content that is designed for people who are on the internet for people who are not on their couches but is also high value enough that you feel like it makes sense to pay a monthly fee for it, so it's not like House of Cards, which you watch on a couch, right? You watch House of Cards, you might watch it on your, you know, at your desk, but, which is really designed for a more comfortable situation than that, like, Orange is the New Black or a sitcom, like, that kind of stuff, you're just chillin'. You're chillin'. Whereas, watching a YouTube video, which you're doing right now, I imagine you are in a more active state of mind. You are leaning more this way than you are leaning this way, 'kay?

But what's the thing that's, like, valuable in the way that, like, you know, 10,000 or 100,000 dollar per minute TV content is but is more lean forward? What is that kind of content and we're gonna try and figure, by... I feel like this is an opportunity to try and figure that out.

Now, I've already seen a question from someone on Twitter that, I don't have it right in front of me right now, but I can paraphrase, and it is, "Do you think this is gonna create, like, different classes among YouTube viewers?" Like, there's the viewers who can pay and the viewers who can't. Are we gonna put, like, little notifications next to a person who can pay's screen name saying like, they're a special, because they have $10 a month to spare? Or is it gonna just create a tiered system in terms of fans who can, who are watching the exclusive content and fans who can't afford to watch the exclusive content and feel like less good fans, not because they're not dedicated and interested in the creator, but because they just don't have $120 a year to spend.

That's actually one of my main concerns with this. I think that it will, at least to some extent, do that, and I think that's a bummer, and that's why John and I, we had the opportunity to make YouTube Red content, and we have so far said no. We've so far said we want, like, certainly all the stuff that we're currently doing, we would want to continue being available on YouTube, but if we produced a new show that was, like, more high quality, expensive-looking, interesting stuff that we couldn't do unless there was that subscription payment, we 1) don't really have any ideas that match that, and 2) we do feel a little weird, like, we feel weird about having content that people would have to pay for. I don't, I certainly don't hold it against any creators who are doing this, like, I think if I had a really good idea that matched really well, and, like, I felt like was undoable without that kind of support, I would totally do this. I just, we don't have any ideas like that and I'm a little bit, like, sit back and wait and see on any, like, big new things that are happening on YouTube, because you can know, like, how the system works but you don't really know, like, systems are designed by the platform, but they're also designed by the user, like, users kind of decide how these things get used, whether they get used, and how they're gonna feel about it.

The other question that I got a lot is, "How does this affect YouTube creators?" Is this, like... Okay, so you're taking away the ads, in that case, how does a YouTube creator make a living? Well, the answer to that is that they get a portion of the money that you pay, that, the $10 a month that you pay. That, all that money does not go to YouTube. Actually, the majority of it doesn't go to YouTube, the majority of it goes to the creator of some kind. Now, it's confusing. This is obviously a very free-form video, I apologize for that, I got a lot to do today.

Let's back up and say there's, like, look at, like, a really, like, hardcore power user of YouTube who watches every ad, doesn't have any ad-blocking software installed, is just a, like, watches tons of videos, like, if you watch like, two hours of videos a day, every day, you watch about 400 videos a month. And if you watch 400 advertisements a month, you make for YouTube maybe, like, $2 a month and that then gets split between the creator and YouTube, so the creator gets 55% of that, YouTube gets 45% of that, so basically, let's just average it out and say that the creator gets a buck, YouTube gets a buck, but that's only for the most dedicated crazy you watch YouTube videos a lot and you watch all the ads, you never skip any ads, and that's nob... that person doesn't exist. Like, I probably earn for the creators I watch on YouTube, I probably earn for them maybe 30, 20 cents a month, maybe 10, it depends.

It depends a lot on where they are, there's a lot of variables there, but like, a tiny, tiny amount of money compared to $10 a month, and what's gonna happen is, there was a contract that was leaked, it's on TechCrunch, it says that the creator of the video, the creat... the, sort of the "creator-portion" is gonna get distributed by watch time, I think, mostly. So, if you spend an hour watching YouTube videos and 10% of that hour... Okay, over the course of a month, you spend an hour watching YouTube videos, hopefully you watch more YouTube than that if you're gonna pay for it. You spend an hour watching YouTube videos. If 10% of that time was spent watching CrashCourse, then CrashCourse will get 10% of the "Creator Portion" of that money, which is 55% of what YouTube is making. Now, it's not 55% of $10, it's 55%, in the contract, it says "of total net revenue", and net revenue is basically your revenue after costs.

Now, the reason that they say that must be that there are some costs, and I don't think that those costs are YouTube's costs, like, serving the videos or, you know, like, marketing it, or whatever, I think that those costs are external to YouTube, those are people that YouTube is paying to be able to make the system work, and I don't know who those people are, I don't know how much those costs are, but basically, if those costs are $0, then we have $5.50 to split between all of the people you're watching, and that's just a massively higher number than you could ever generate watching advertising, as a viewer, but I don't think it is going to be $5.50 or else they just would have said that. My guess is that total net revenue is less than $10 and the total net revenue is.... But like, I have no idea how large that number actually is, but no matter what, creators are making more money than YouTube is, so after their costs, YouTube is making 45% and creators are making 55%, so there's no way that YouTube would be proposing this system if they weren't going to be making more money per user for subscribed for, like, YouTube Red user versus an ad-only user, because YouTube's making 45% of it and creators are making 55%, so creators are making more than YouTube, YouTube has to be making more than they otherwise would be, so it's gonna be a good thing for creators.

This money gets distributed, by the way, it doesn't matter how big a YouTuber you are, if you... It's actually probably better for small-scale YouTubers, 'cause it's more likely that small-scale YouTuber people will have fans watching YouTube who will subscribe to YouTube Red, because they are YouTube power users, they care a lot about YouTube, they spend a lot of time on YouTube, so it's more likely that your viewers if you're a smaller channel will be subscribed viewers, YouTube Red viewers, than, say, somebody who has, you know, a more sort of like, generic following or somebody who makes viral videos for example. Community focused videos, I feel like will definitely have more YouTube Red viewers than non-community focused videos, just because I think a lot of viral views happen from people who don't even really know that YouTube, as a site, is a place where there's a culture and a subscription box and that sort of thing.

So a creator will make more money from you if you are a YouTube Red subscriber, but if the only reason you're doing this is because you want to support creators, it's not a great way to do that, because one) even in the best case scenario, which is not reality, we'd only be getting $5.50 of the $10 you would be spending, thus it is better to probably buy some merch or if you can, if the person that you want to support has a Patreon page, support their Patreon. Please support CrashCourse and SciShow's Patreons, because they let us do cool things that we wanna do more of, and if you wanna support CrashCourse and SciShow, don't sign up to be a YouTube Red supporter, give us $10 a month, which would be huge, or just $1 a month, 'cause after dividing it among all the people whose videos you watch, I'm sure we'd be making less than $1 a month from you, so the smallest amount that you can give on Patreon would be a bigger deal than signing up as a YouTube Red subscriber, but if you like the idea of the service, that you want something like Spotify that also gives you ad-free YouTube, or you want ad-free YouTube and don't care about the music system and just wanna make sure you're not messing with creators' revenue streams, YouTube Red is fine, fantastic, like, do that. I'm doing it. I'm definitely gonna pay the day that I'm able to.

Ah! There's the thing about YouTube people having their videos pirated if they don't sign up for YouTube Red. That is confusing on a couple of levels. First, that sounds like if you're a creator, you have to pay $10 a month or your videos will get pirated. That's not what we mean by saying sign up for YouTube Red, what they mean is that you have to opt into the new Terms and Conditions as a creator that says YouTube is allowed to, like, host your content and charge people a subscription fee for it. The old Terms and Conditions did not allow that, the new Terms and Conditions do. You have to sign up for the New Terms and Conditions or else YouTube is not legally allowed to take ads off your video. The problem with that is that then, if they launch YouTube Red and there are some people who haven't opted in, who haven't agreed to those new Terms and Conditions, then the only thing YouTube could do, legally, is continue playing ads on those videos or take those videos off and not have them on the site at all. This is not ideal, I'm sure that it's part of why it's taken a long time for YouTube Red to happen, but you can't, as a YouTube Red subscriber, suddenly get a pre-roll because somebody didn't opt into the new Terms and Conditions.

Now, the reasons someone wouldn't opt into the new Terms and Conditions include 1) they never look at YouTube and don't have the same e-mail address or address as they used to have, and so YouTube can't get in touch with them, so they don't know that this is a thing, and that's gonna happen. There's a lot of YouTube users. Some of them are going to be disconnected enough over the last ten years that they no longer have any connection to their YouTube channel or their YouTube videos and that it'll get pirated just because they weren't there to click the clicky thing. 2) If you are, want to protest YouTube Red for some reason, if you say, like, I don't like the idea of YouTube, the whole ethos of this site is that it's free, it's always been free, the idea is that it's free and I don't like the idea that it's not free and so I'm going to basically cast my protest vote and say if YouTube says that this is gonna a thing, I don't want it to be a thing, and so they're gonna private my videos and that will be my way of being an activist in opposition of YouTube Red. The third reason is that they have a production deal and a distribution deal that comes along with their production deal that says, you know, your content can exist on YouTube, but only because people can't pay for it there. It also exists somewhere else first, like cable or another platform. It's basically if you got, if I got money from someone to make content, and they said, here's the deal, you make this content, you can, we'll pay you to make the content, we'll put it up on Yahoo for the first six months, and then after that, you can put it on YouTube, but part of that deal is that you can't have somebody pay for that content, you have to have it just be free ad-supported content, and some people have those distribution deals that say that they can't charge for content, particular pieces of content that they have on YouTube, which means that those pieces of content will be pirated.

So, that's what that's about. If you haven't opted in as a creator, it's either because you don't need to, and your network did it for you, you did it and you didn't realize it, because it was like a thing that was like, click to agree to the new Terms and Conditions and you were like, click, and that was it. Or because you haven't done it and it will say on the top of your YouTube channel if you go to your creator dashboard, it will say SIGN UP NOW, NOW NOW NOW NOW NOW NOW. It is not hard to miss.

Do creators get paid for ads I no longer see? No, we get paid with your subscription dollars. Oh. Will YouTube do things to encourage people to sign up for YouTube Red like block ad-blockers or play more ads than they used to? I don't know. Probably not. I don't feel like that would happen. I hope it won't happen, but you never know. Blocking ad-blockers, ehhh, like, I feel like there's a case to be made that that's an alright thing for a business that's based on ads to do. That's like a whole internet-wide discussion that has, I feel like, not that much bearing on YouTube Red. Playing more ads, I think that YouTube's goals would, don't really align with that. I think that if they play, if they like, forced a 30 second pre-roll before a 4 minute video or if they forced multiple pre-rolls before a video like that, then people would stop using YouTube. So hopefully we won't see that. I don't really expect it, but you never know.

It basically will come down to whether that's a good thing for, like, the long-term success of YouTube. I think YouTube is still playing a long game here. I think that YouTube Red will start out not being a really substantial thing, but the hope is that it will grow over the next decade to be something that a lot of people sign up for, hundreds of millions, like, like, tens of millions, hopefully and hundreds of millions potentially. The kind of thing that would happen that would make it just like a huge game-changing thing for media, for entertainment, for YouTube, and I think for the internet in general, so I don't know, like, I'm interested in YouTube trying new things, like, I was on YouTube before they even had advertising, and the advertisements were.... People hated them at first, and they have now become completely accepted, and also then, that frankly, has created a really vibrant and amazing content ecosystem on YouTube. I had a reporter from Time ask me this morning if this felt like it was contrary to the ethos of YouTube and I said no, because to me, YouTube isn't about free content. YouTube is about a place where you can create content and also have a path to being a professional creator of that content, and that is not like any other platform out there, that is an amazing, wonderful thing about YouTube that I'm extremely grateful for, and so to me, it seems like this is a logical step for YouTube to create other ways for creators to fund their content, create other ways to, for viewers to pay for it, not just through their eyeballs being, and brains, being affected by messages from people who pay, which I really don't like as a model anyway. 

And that's my thoughts on YouTube Red. I hope that it was helpful and that some of you watched this whole video. It's very long. I apologize.