Is India ready for YouTube Red?

According to FICCI – KPMG report 2015, YouTube continues to hold the largest share of online video in India, accounting for more than 50 per cent of all online videos watched. The arrival of YouTube Red however, poses some serious questions for YouTube’s India market.

India was expected to become second largest market for YouTube in the world in 2015. A major reason for this apart from the largest internet population and increase in smartphone penetration, is that the less than 35 years age group diverting towards a ‘what I want to see’ kind of appointment viewing.

As and when YouTube Red launches in India, the online video consumption and creation – both are in line for a massive change.

Shades of red

YouTube claims Red to be an answer to users’ plea for uninterrupted services and variety. A membership designed model, YouTube Red will be launched on October 28, 2015 in USA for $9.99 a month. The service will then be rolled out in rest of the markets.

To begin with, increasing demand for ad free content makes YouTube Red a steady source of revenue for Google. While YouTube has played a significant role in Google’s ad revenue game, the video viewing platform has been receiving hostile competition from social media platforms such as Facebook and Twitter.

A major winning factor for video content on Facebook is the view calculation – on Facebook a view is counted after 3 seconds of watching, while on YouTube a view is counted only after 30 seconds of video consumption.

Additionally, marketers have been uploading same content on various platforms, taking the exclusivity bit from YouTube. With YouTube Red, the video giant aims at redeeming the exclusive content card by focusing on its winning content creators such as PewDiePie.

The India story

If and when YouTube Red comes to India, it is likely to create original content with booming creators such as TVF and AIB.

YouTube content creators majorly charge brands basis their reach and impact. YouTube Red might act as audience divider, requiring content creators to derive different metrics.

YouTube content creators as of now do not hold that kind of appointment viewing, where audience would be ready to pay an amount to catch up with them.

Additionally, a number of budding content developers are in the audience acquisition phase, thus making a paid service such as YouTube Red redundant for them. Also, established players like AIB are now moving beyond YouTube and collaborating with television channels, thus giving their loyalist fans more a chance to witness them on multiple platforms.

TVF too branched out with TVFPlay.com for better content dissemination.

While YouTube Red does not compete directly with other video on demand (VOD) apps such as HotStar or SonyLiv, it bears resemblance to certain indirect competition. Most VOD apps have exclusive content offerings (with ads) that are available for the viewers at no cost. This might act as a hindrance for YouTube that will be dealing with a huge chunk of Indian audience, who is not used to paid content.

With YouTube Red also comes the fear of eventual death of free content on YouTube. Between paid format where content creators are getting paid more as compared to the free content where ad sense forms revenue source, former might be in a winning position.