Every big company gets greedy. It’s pretty much inevitable. They’re doing well but they want to take that next step to see that massive increase in profits. I guess I can’t blame them as it is business and the bottom line is everything but the little guy is the one who always gets up getting screwed in this situation. The company in question this time is everybody’s beloved YouTube, the place where we go to see everything from videos of a bunch of teenagers fighting in the schoolyard to Katy Perry’s Dark Horse and everything in between. After all, the world has gone viral. It looks like YouTube is planning to charge users to see videos without advertisements. Who’s getting screwed the most? Indie labels of course. Rich Bengloff, president of the indie label trade group American Association of Independent Music told www.sfgate.com, “It’s awful that Indies are being treated as second-class citizens by YouTube.” This new model would ask users to pay a fee to see music videos without ads. Right now commercials precede most music videos uploaded by labels and they in turn collect a portion of the advertising revenue. If YouTube sold subscriptions the labels would get a cut of those fees. That could work for a major label but the cut for the Indies would be way too small. Bengloff went as far as to say, “We feel like since they are a monopoly, we need to be on YouTube,” both to promote the artists and to make money. According to research firm eMarketer, YouTube is expected to make an estimated $3.2 billion in ad revenue in 2014, not including subscriptions. YouTube has become synonymous with free online videos. For all intents and purposes they are the only game in town with over one billion users monthly, an insane number. This isn’t to say this switch will be easy for YouTube. After all, their massive amount of users are used to free content and making the switch from free to paid is never easy. Many companies would go by the wayside but YouTube is so widely used and recognized it would likely survive and profit from the change. Major labels would strike better deals due to the amount of content they provide to the site. Indie labels would definitely suffer. Would you guys pay a subscription fee to use YouTube?
Article By: Jon DaBove