Mike Hanbery June 19, 2013

Denver Social Media: Marketing Opportunity in Paid YouTube Channels?

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Paid YouTube channels in a free YouTube world presents an interesting decision for social media marketers.

An Example of Success on YouTube

Some best practices won’t change between paid and traditional YouTube videos. When social media marketers search for a benchmark against which to compare or after which to model a YouTube campaign, the easiest example is Blendtec, known principally for its Will It Blend? series.

The free channel has over 600,000 subscribers and a total of 223 million channel views and is a bona fide benchmark of online virality. Unlike major brand triumphs like Old Spice’s The Man Your Man Could Smell Like series, which owed much of its online success to major penetration on national TV, Will It Blend was as close to a pure online organic opt-in experience as you’ll find.
The Will It Blend series owes its success to each of these factors, presented in no particular order:

  1. Content. The visuals are simple and meet expectations. The host is professional but not over the top, successfully becoming a mere deus-ex-machina that allows the product to be the star of the video. The videos are funny and appeal to all audiences. The fact that the graphics, wardrobe and setting are consistent indicates these are produced en masse, meaning they are shot one after the other. Several months’ content can be shot in a day or two and formulaic post-production can be contracted as well. This is an old technique to minimize costs and maximize efficiency.
  2. Length. The longest video, which features a mild satirical send-up of Steve Jobs and Apple-ophiles, runs less than 3 minutes. They are thusly easy to consume and share.
  3. Promotion. Will It Blend YouTube videos are published on Facebook, Twitter and Blendtec’s website. The Internet user can consume, interact with and share them at her leisure in the place of her choosing. Each of these channels employs best practices to maximize engagement and a content plan consistent with but independent from the others.
  4. Video Optimization. Most of the products being blended are popular in and of themselves. The descriptions and metadata of the videos are optimized for search.
  5. Timing. The release dates of the videos leverage online activity the brand didn’t have to generate. Examples of subjects include: The Mayan calendar – on Dec. 21, 2012; iPad and iPad2 – hot anytime, but especially when the new versions are coming out; HALO 4 – released on the day many millennials and 30-year-old-parents’-basement-dwellers camped out to purchase the newest version of the game; Roses on Valentine’s Day – Many single people hate Valentine’s Day. Many non-single people do as well but can’t say so out loud for fear of incurring the wrath of Hallmark and significant others.
  6. Volume. When YouTube videos finish playing, “similar” videos are suggested. By consistently creating a large volume of content optimized around the same keyword phrase (“Will It Blend”), YouTube funnels the user directly, continuously and virtually exclusively from one WIB video to others.
  7. Consistency. For years, Will It Blend provided new products and scripting for its audience, always giving it a reason to check back for more.
  8. Engagement. You know the Dos Equis Most Interesting Man in the World? You know those phrases about him that make up the voice content for the TV commercials (“Cuba imports cigars from him.” “He lives vicariously through himself.”)? Only the first few spots were written by the marketing department. The rest came from Facebook and Twitter. Will It Blend did the same thing, successfully asking its following what products they would like to see destroyed…er, blended.
  9. Quality. The dialogue and action are scripted, the shots are steady, the set is evenly and fully lit, the audio is clear, the video image is obviously from something far superior to a cell phone, the graphics are simple but professionally produced.

Why Paid YouTube Channels?
The short answer is YouTube sees the same market opportunity as Hulu, Netflix et al. As the Internet and devices grow increasingly integrated and capable of delivering higher-quality content, power in the marketing relationship shifts to the consumer. The delivery and business models for cable and satellite are dying. Content is being presented in this way because consumer behavior has demonstrated a desire for it to be so and because the market requires a model that appeals to the interests of providers.

What Happens Next?
Taking the end user in mind—as marketers must always do—the question is what will be the difference in the consumer experience?

  • Access to content otherwise unavailable. Just as with “freemium” models in other verticals, we will see “teaser” content on free channels and longer-length, better quality and exclusive content on the paid YouTube channels. The Wall Street Journal and Financial Times use a similar system for their online content. All of their print content exists online but if your IP address tries to access it too many times, you’ll receive a politely-worded screen advising you that this content is available to subscribers. Premium TV channels frequently offer free weekends or trial periods, during which they heavily promote the flagship content scheduled in the time to come after the free preview has ended. Content on professional wrestling giant TNA Impact Wrestling’s paid YouTube channel centers around archives and nostalgia and is the only place fans can go to experience it.
  • Greater control over the environment. As Janko Roettgers states in a May 11, 2013 article on PaidContent.org:

Sesame Street videos are widely available online, including on PBS Kids, Sesamestreet.org, YouTube, Netflix and Hulu. But especially on YouTube, it’s often just one click from a cute Elmo video to one of someone setting an Elmo doll on fire. Giving parents an option to access full-length-episodes, and keeping kids glued to the official Sesame Workshop channel, may get quite a few of them to pay a few bucks a month.

  • Elevation and failure of niche channels. Shakeout occurs in each market development. Most new players will mismanage their presence, make poor decisions, overreach and perish. A few will effectively identify the needs of their audience, match goals and measurement, manage the channel well and succeed.

Measuring ROI
Monthly subscription rates range from $0.99 to $4.99. Profit or breakeven on the tactic will only be achieved through volume. Considering the cost of producing new professional videos at the rate of something even a fraction of Will it Blend, for most businesses, the initial goal of the paid channel must be to provide another outlet to generate interest and engagement in other profit centers.

Will it Blend videos use intra-video pay-per-click promotions that allow users to click through to a purchase-ready landing page on Blendtec’s website. Could this tactic backfire on a paid channel? Perhaps, as we don’t expect commercials on HBO or Showtime, but TNA’s showcasing of its old Pay-Per-View events at $4.99 per month should increase orders of individual Pay-Per-View events on cable or satellite ranging from $9.99 to $44.99 each. We can expect TNA to offer its YouTube audience a coupon code for discounts on the paid event. If a $4.99 discount is offered on a $44.99 event, the paid YouTube channel subscription is essentially free for the month and TNA has exchanged eleven percent of profit margin per redemption for understanding the effectiveness of the paid YouTube marketing channel.

How to use this Information
Success in paid YouTube channels will result from diligent planning and honest evaluation of what it takes to gain attention share and what to do upon acquiring it. Paid YouTube channels increase the investment for social media marketers, commensurately increasing the expected return.

To successfully leverage paid YouTube channels, social media marketers must employ best practices and plot an integrated strategy for the channel. Success will come to those who make decisions based on good data, define their unique brand experience, know their audiences and actively appeal to them.

Most social media marketers will continue to employ online videos without adding the dimension of the paid YouTube channel.

Which route will you take?

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