YouTube's AVOD Experience to Deepen Public Engagement and Advertising

Key view:

• YouTube has begun broadcasting free movies through a US-funded video-on-demand (AVOD) service.
• As YouTube explores alternatives to subscription-based advertising revenue, studio films and TV shows provide advertisers with a familiar, safe environment that encourages their participation.
• While other platforms already use AVOD models, YouTube can leverage its 1.9 billion existing monthly users and better targeting of ads with Google data.

GoogleOwned YouTube has signed an agreement with MGM Studios to offer 100 free movies with commercials in the United States. YouTube has been offering movies and shows for rent or buy for some time, but this is its first foray into the advertising-funded Video On Demand (AVOD). This is an encouraging sign that she is turning to new business models to improve income diversification. YouTube has indicated the opportunity to expand its film selection and enter into other agreements with advertisers: for example, advertisers sponsoring film screenings or hosting exclusive screenings. The terms of the transaction or the distribution of advertising revenues have not been disclosed. in any case, the model itself will likely be refined during the pilot project prior to commercial deployment.

Advertisers on YouTube are increasingly concerned that their ads are adding to unwanted content generated by users. In 2017, major brands withdrew their ads from YouTube after a series of high-profile incidents, which resulted in theadpocalypse", The demonetization of many channels and videos of the platform as a preventive, regardless of the actual content. Although the situation has improved since then, a number of creators have gone on to compete with Twitch (a platform supported by Amazon) and many have started to rely more on subscription revenues. YouTube's attempts to streamline the sale of ad space to user-generated content have not been successful either. For example, the effectiveness of the Google Preferred program, which was supposed to direct ads only to the best creators of content on YouTube, was also questioned by advertisers because of the presence of highly inappropriate content.

The studio films and TV shows, meanwhile, allow YouTube to create a safe and familiar branding environment for the brand while leveraging YouTube's 1.9 billion current users and its ability to target ads with the help of Google data. In addition, as consumers watch more and more YouTube on their TV, an offer focused on movies and free shows will be a welcome addition. According to YouTube, television is its fastest-growing media and has recently given advertisers the ability to target their ads only to viewers watching videos on YouTube on television.

North America represents a huge market for YouTube, but Asia will dominate in 2019

Consumer Internet video traffic by region (EB / month)

f = Cisco forecast. Source: Cisco Visual Network Index

YouTube (and Google) go beyond advertising

Media consumption moves away from live, ad-supported streaming models to demand models supported by subscription: Netflix instead of television, Spotify instead of radio. YouTube knows this, and in May 2018 reorganized its new subscription video service, YouTube Red, into two new services: one for music and video, YouTube Premium, and one for music only, YouTube Music. The latter will be different from Google Play Music, Google's other streaming music service, but it is planned to merge them from 2019.

YouTube Music allows YouTube to compete with Apple Music and Spotify at similar prices, while YouTube Premium offers YouTube ad-free videos and original content produced by YouTube in collaboration with established studios and the platform's most popular content creators. -form.

Finally, YouTube is also evolving to compete with Twitch and Patreon gaming platforms, a subscription platform that allows creators to receive monthly subscription fees. Although YouTube has been offering a monthly subscription service since 2013, its "pay channels" initiative has been designed to allow viewers to access long form content created specifically for these channels. Its new service, YouTube Sponsorships, allows viewers to pay creators a monthly subscription of $ 4.99 in exchange for exclusive benefits. In the same way as Patreon and Twitch, it is designed to allow viewers and fans to directly support their favorite content creators.