YouTube’s Red to launch here soon

YouTube will roll out its subscription service Red in Australia later this year as it takes on Netflix and Amazon.

Red launched in the US in late October.

YouTube will roll out its subscription service Red, containing original movie-length shows, in Australia later this year as it takes on online video rivals like Netflix and Amazon.

In an interview in Los Angeles, the company’s chief business officer, Robert Kyncl, said Red — which launched in the US in late October — was a big bet for the platform.

“Our focus is on the under-35s,” he said. “If you look at TV, it is generally over that age and we are under. We are looking at the new world and trying to expand it.”

The former Netflix executive confirmed Red would invest in up to 20 new shows each year but said: “We are not a production company; you could think of us as a distribution platform, like the TV networks.”

He said future media would be dominated by interactive content and a “whole new ecosystem developed outside traditional media”.

“It will be personalised and easily shareable, and it will feel weird when you can’t do these things — search, share, comment, interact,” he said.

Along with exclusive content, Red blocks all ads and allows content to be viewed offline or on background to allow multi-tasking. A new music app is part of the package, but the buzz is about four new shows called “Originals” produced by YouTube stars with financial backing from the company.

Kyncl said the company was betting on stars like Lilly Singh and PewDiePie to pull in subscribers.

Canadian Singh has an estimated 8 million subscribers to her YouTube “Superwoman” channels, while Swiss comedian and gamer PewDiePie has boasted up to 40 million subscribers.

The figures help make YouTube the second most-used search engine after its owner Google, with estimates that 400 hours of video are uploaded every minute. There are one billion unique visitors to YouTube each month.

Kyncl declined to give numbers on take-up for Red, which sells in the US for $US9.99 ($14) a month, but said: “It’s tracking exactly to our plans. We have been at it for three months, people are coming off free trials and signing up. We are happy with progress.”

While the push to get users to pay is intense, Kyncl stressed advertising revenue would always dominate.

“We wouldn’t do this (Red) unless we had high hopes for it because it is a big investment for us,” he said.

“But we think ads for us will always be larger. We will bring another billion people online in India and Indonesia and Brazil and Mexico where the ability to pay subs is not so high. So likely, long term, our ad business will be much larger.”

He declined to predict the split: “To be honest, everything is a guess. In the past it was 50:50 split (between subscription and advertising for online outlets) but you could also say that consumers did not have a choice but to sign up.”

Kyncl said YouTube had a different approach from other online services and TV networks: “We have a platform that is free and there are phenomenal content creators who have risen to stardom … it makes sense to bet on them, to focus on the people who have become large on YouTube and produce programs that they could not do on their own.

“We are betting on a new crop of stars and the thesis is that, just as they are powerful (for example) in influencing L’Oreal customers to buy L’Oreal products, they will be just as successful in helping to drive growth of YouTube.”

Helen Trinca was a guest of YouTube in the US.