Recently, YouTube announced significant changes to their subscription platform, YouTube Premium (formerly YouTube Red). They are stepping away from subscriptions and will be opening up their premium content for free, with ads, to all YouTube users. USA Today published an article about the change, titled “Not Everyone is Willing to Pay for Subscriptions. Just ask YouTube.” According to the article, people are burnt out on subscriptions — or, as the article put it, “The people have spoken. Enough with all those subscriptions.”
There are a lot of subscription services out there and, yes, it is possible that we may hit a saturation point. However, I don’t believe this was the problem with YouTube Premium. People will pay for almost anything that delivers what they deem to be valuable and that fits into their view of the world. They’ll even go into debt to do it. It’s why there are endless credit card offers.
I think the actual problem with Premium is that YouTube decided to play “me too” with other streaming services.
YouTube built their strategy around what everyone else was doing, and now they are coming to grips with a truth that is all too frequently ignored: Emulation is not a product strategy.
This kind of emulation happens all the time. As designers, developers, entrepreneurs, and product managers, we look at best practices, analyze the competition, and then, often, we take a copycat approach to building our product. We think that if it’s working for them, it’s got to work for us too. The problem? It frequently doesn’t — at least not the way we think it will.
Your product, your use case, and the space you occupy in people’s minds is unique. There are so many factors that come together to create the perception people have about your brand and your product. No two brands have the exact same fingerprint; they never will.
When a company copies another product, they assume that what they’re copying is actually successful for the company they’re emulating, and that original product was designed to accomplish the same goal.
YouTube watched the evolution of the video streaming market and saw what they perceived to be an emerging formula: Create high-quality content with well know personalities, put it behind a paywall, and people will pay. Worked for Netflix. Worked for Amazon. Worked for Hulu.
But the full picture is not that simple. Netflix found success because they have been subscription-based since Day One. They have always been known as a place to get high-quality content, even when they were delivering it in little red sleeves. Hulu made it work because they are the streaming equivalent of TV. I don’t want to pay for cable, but I want my cable shows — so I turn to Hulu. Amazon made it work because their users already paid for a subscription, Prime. So they bundled their video subscription service with that. I question whether Amazon Video would have been successful without that bundle.
On the surface, these three companies appear to have done the same thing. In reality, each service actually built its own premium content offering that specifically worked for its users, their use cases, and within the DNA of their company. YouTube didn’t do that.
YouTube has never been known for premium content — or even paid content, for that matter. They’re actually known for the exact opposite: low(er) quality, free content. Part of finding product market fit is working to attach your product to a specific space within the mind of your audience. Once you do that, it becomes very hard to dislodge yourself from that space, almost harder than getting yourself there in the first place. YouTube made themselves the place everyone goes for short, free content.
YouTube was never going to pull off the Netflix model. It’s not part of their fingerprint. It doesn’t align with the role YouTube plays in its customers’ lives. The platform’s big pivot has little to do with the public’s willingness or unwillingness to pay for another subscription.
Emulation as a product strategy is attractive for a lot of reasons. For one, it’s easy. You don’t have to figure anything out; you just copy. It also feels less risky, because other people have already tested the ideas and they work. But this is misleading. In reality, emulation is just as risky as trying something new, and maybe even riskier.
The risks are numbered. First, there’s ignorance. Heading down a path of emulation can drive product managers to start ignoring the things that are special, unique, and valuable about their product. It can encourage them to compare themselves to perceived competition instead of focusing on their customers.