Know Your Audience
Positioning an Ask as a Demand Stinks
I don’t believe it’s wrong for creators to want to see the fullest version of their imagination realized with as many resources as possible. I do believe it is wrong to do so at the expense of your audience. Production value is dope to have, but it isn’t gonna mean anything if the content lacks resonance.
I make YouTube videos for Paddle and one of the things we do is help folks understand how to price their product. I believe this makes me uniquely qualified to chime in on the recent debacle with the YouTube channel Watcher and the controversial launch of their own subscription streaming platform.
(If you’d like the full context, check out the video yourself).
This announcement was met with massive controversy (80,000+ comments to 36,000 likes. Dislikes are not viewable).
To paraphrase, this video was a goodbye to YouTube, aptly titled “Goodbye YouTube”. The Watcher YouTube channel would not continue to function as initially promised. Ryan Bergara, Shane Madej, Steven Lim, were featured in the highly produced video discussing the reason for this decision. They launched an OTT streaming platform, like Netflix, Hulu, etc, where viewers could consume future Water content for the price of a monthly or annual fee. Fans would no longer be able to view future Watcher Content in its entirety unless they passed the paywall. There was no warning, the decision was effective immediately.
As someone who has been a YouTube creator for over a decade, and now working at a company that helps folks understand subscription pricing, I feel obligated to offer my insight.
I won’t beat around the bush, I believe this decision is tone-deaf and disingenuous. I recognize that individuals who post to YouTube are not necessarily seeing that as their end-goal, rather they see it as a gateway to future opportunities, just ask Justin Bieber or more recently, Emma Chamberlain. I don’t think it’s wrong to see the platform as a stepping stone… just be careful with where you are stepping: avoid your fans’ vital organs, namely the heart.
The criticism I have seen is that fans of Watcher (including myself in this group) feel like this is a decision motivated by money and not necessarily done with fan interest at heart. In the initial announcement video, Steven Lim, says this about his early content:
"But I think it really encapsulates early YouTube, which is this, like, unfettered joy of just making something that was in your head and sharing it with the world."
Steven Lim of Watcher
I would argue that this is why Steven, along with the rest of Watcher, garnered such a massive following. I love to see myself in creators, I love to see creators grow and get access to pursue their craft at the level that makes the most sense to them. Sure, creating alone in your bedroom is not an end-goal shared by the masses, it is seen as a gateway to more opportunity. But you can’t forget why you are doing this in the first place as well as who is responsible for getting you to where you are now.
In the economic system we participate in, we are forced to make decisions that give us the best shot at survival. As much as I enjoy making YouTube videos, I can’t just keep making videos in my bedroom forever if I’m not seeing a financial return on them. I need to do something to support that effort. I’m lucky that I’ve found a space for myself to be paid for doing my craft and I also recognize that I must cater my message to the audience that supports it. It’s because of this that I don’t believe the Watcher team is wrong for looking for financial security to pursue their craft. Why shouldn’t they be allowed to explore this route? Do we fault Netflix or Hulu or Max for making us pay to get access to their content?
I disagree with the execution of the decision, but I do not disagree with the decision itself.
Learning from Dropout
Recently, Dropout, another OTT product, announced their rebrand from Collegehumor, a funny website/YouTube channel that has existed for over a decade. There’s a long story to how they got there but the design of what Dropout and Watcher are is effectively the same. The launch, however, went differently. Dropout did not just decide one day put their content behind a paywall, the launch was done while content on Collegehumor was still available to the masses.
Try Before you Buy
Over time, the financial situation at Collegehumor meant they had to cease much of the content created for free and the Dropout site became the cash cow. If you haven’t seen them before, they make a lot of this content available for free in the form of YouTube shorts. You can see clips from full episodes that stand on their own, bites from the full apple but satisfying without needing to indulge further. This trickle of free content paired with the occasional full-episode posted to their YouTube channel gives them a sort of “try before you buy” model where the option is given to purchase more if so desired. Their numbers are not available to the public, but even just looking at the number of subreddit or discord subscribers tops the hundreds of thousands, communities in which you have to know what’s on the paid site to be able to contribute.
But let’s bring it back to Watcher. In the Goodbye YouTube video, the sentimental tone and words of leaving the platform for good don’t carry the weight that the nostalgic clips and depressing music imply. I hear that you are sad to leave this platform, and you’re telling me that you need to do this for financial reasons, but the action that you’re taking means that I do not have a choice in the matter. Fans who have followed them since their buzzfeed days are being told “hey, you know how you like this thing? Well you can’t have it unless you pay me. And, by the way, it’s not actually that expensive so you should just do it.”
This was another major component of the outrage, an arrogant statement that not only was this decision being made without consulting you but it’s really not that big of a deal and you should not be upset about it.
This is where my experience with subscription pricing comes in.
Pricing is Hard
We’ve got plenty of in-depth resources over at Paddle but as a short explainer, there are many different kinds of pricing but let me go through three of the big ones: competitor-based pricing, cost-plus pricing, and value-based pricing.
Competitor-based pricing is crafting your pricing based off of your rival in the space “Oh, Netflix charges $15 per month? We’ll charge $14 so we can beat them.
Cost-plus pricing means pricing based on what it costs to manufacture your product plus whatever profit you intend to make “it costs us roughly $3 per user to make this thing so let’s charge $10 so we can make a healthy profit.
Value-based pricing is pricing based on what your customer believes the product is worth. Simple to explain, difficult to execute.
I couldn’t tell you what Watcher used to price their product, but I have a pretty good guess that they didn’t use value-based pricing. It’s an uncomfortable position to be in to ask your audience to give you more money for your product, unless you’re providing more value in that ask (or demonstrating the value is larger than they might realize).
With this announcement, it is clear that the Watcher crew did not do their homework when it came to figuring out what their audience believed their product was worth. They already have a dedicated audience of paying customers in the form of their Patreon, might be a good place to survey the value of their product if you ask me. It’s not wrong to want to produce higher-quality content, pay your staff more, and live a comfortable life, but it feels slimy to position this ask as an ultimatum. Your access to resources is given by your audience.
There’s a world where this announcement goes much smoother and is perhaps seen as a step towards empowering independent creators that other folks can eventually follow, I know this because the Watcher crew actually published a follow up video where they changed tact. I admire their humility in recognizing a mistake and the tone of this video is much more genuine than the first.
Asking for more is good, great even if you can demonstrate the return on investment. None of this is easy and I let most of the leg work be done by folks more knowledgeable than me. I hope Watcher finds success. I love seeing more opportunities given to folks who are trying to make their own creative corner of the internet. I hope this is a helpful learning exercise for Watcher. I’m excited to announce the launch of my own OTT service: Benville for a mere $60 a month to read further than this sentence.
(Kidding).