In a move to make YouTube more competitive with streaming giants like Netflix and Hulu, the popular video hosting website has begun making a select few videos available for free. Starting last week, YouTube began to silently roll out movies on their platform.
Classics such as The Terminator and Rocky are now available for free, although they're supported by ads. According to one YouTtube executive, it's a move that has been in the works for quite a while.
"We saw this opportunity based on user demand, beyond just offering paid movies," Youtube director of product management Rohit Dhawan to AdAge. "Can we do ad-supported movies, free to the user?"
"It also presents a nice opportunity for advertisers."
According to AdAge, YouTube is in the process of building a system that will eventually allow sponsors to purchase advertising on specific movies, allowing for very selective advertising buys. From a marketing standpoint, this is a move that'd be incredibly helpful for franchises such as Star Wars or the Marvel Cinematic Universe to help promote upcoming movies to viewers watching older franchise movies.
As of now, there are nearly one hundred movies using this new ad-supported format and although classics like The Terminator and Rocky are available for free, the majority of the library is made up of middling flicks like Kevin James' Zookeeper and Frankie Muniz's Agent Cody Banks.
While streaming giants have been branching out into original programming, that's a market that YouTube has yet to hammer down on. The website launched the Karate Kid-spinoff Cobra Kai last year but it has a ways to go to reach the volume of content that Netflix and Hulu are producing. And that's way, according to one industry analyst, that ad-supported movies might be the route to go for YouTube.
"Ad-supported video is a huge market," says Farhad Massoudi, CEO of Tubi. "There's a lot of consumer traction and I expect all the major companies will jump in at some point. This is a huge business opportunity."
"Low-quality, low-production video is predominantly what's available on the web, and advertisers have seen a lot of issues with that. They don't want to be associated with that type of content."