1. Group 4: Melanie Goulet, Devon Hawkinson, Tommy Kusnierz, Jalisa Valladares, Candace
Williams
2. Who
What
When
Where
YouTube Red is a paid streaming subscription service exclusively
for YouTube users and subscribers
● Advertising-free streaming of videos,
shows and movies
● Offline play
● Background playback of videos on
mobile devices
● Ad-free music streaming
● "YouTube Red Original" series and
films
United States, Australia, Mexico, New Zealand and South Korea
Originally launched in November 2014
Relaunched as YouTube Red on October 31st
3. Youtube Red’s Customer Profile
Demographics
● Ages 11 - 35
○ Gen Z & Millennials
■ Allows for a very broad
demographic reach
○ Male & Female Users
■ Base is evenly split
○ Limited Availability
■ United States
■ South Korea
■ New Zealand
■ Australia
■ Mexico
Psychographics
● Viewers who are too busy to
go out to buy films or go to
the movies
● Frequent movie/show renters
● Those who value their money
● Spend more time watching
online
○ Smartphone
○ Tablets
○ Computers
○ Smart Televisions
5. Technological Advances
○ Youtube Red App
○ Offline Music Service
○ Artist pages
○ Youtube “Originals”
■ Competing with Netflix
○ Pays back creators
■ Youtubers who film
■ Creates another form of
employment
■ Gives opportunities to famous
bloggers to act
Situational Analysis
6. SWOT Analysis
Strengths
● YouTube’s strong brand image
● Creators
○ Original content
○ Differentiation
○ Reputation
● Additional service offerings
○ Music/Gaming
Weaknesses
● Little to no promotional efforts
○ other than owned platforms
● Ambiguous service offerings
● Established free content provider
○ Difficult to charge for services
● Advertisement-free service
○ Loss of potential revenue
● Lack of high ratings/reviews for original
content
Opportunities
● Foreign markets
● New genres
● New age demographics
● Technological advancements
● Video becoming the primary content
consumed by web-users
Threats
● Established competitors
○ High perceived switching costs
● Popular shows tied to certain streaming
platforms
○ Game of Thrones
○ Stranger Things
● Fast-cycle, mature industry
7. Marketing Problem
YouTube Red’s poor brand awareness, low global market penetration,
poorly defined services, and new freemium business model are all
factors affecting the streaming service’s ability to attract new customers.
8. How does the lack of brand awareness and promotion impact
YouTube Red’s efforts of attracting new consumers?
Who is the target market for YouTube Red?
Does adding paid services affect consumer behavior
and purchase decisions?
Are consumers adequately informed about service offerings
and benefits of YouTube Red?
Research Questions
How can YouTube Red reach and penetrate a
larger global audience?
9. “Who is the target market for
YouTube Red?”
Ho: Millennials are not more likely
to upgrade their YouTube
subscription to YouTube Red
than older generations.
Ha: Millennials are more likely to
upgrade their YouTube
subscription to YouTube Red
than older generations.
● Currently, YouTube Red’s
target market might primarily
be millennials over any other
age demographic.
● We chose to focus on these
variables to figure out whether
millennials are in fact the right
target market and if not, who
should YouTube Red be
targeting instead?
Hypothesis 1
10. “How does the lack of brand
awareness and promotion impact
YouTube Red’s efforts of attracting
new consumers?”
Ho: YouTube Red’s customer
subscriptions are independent
from their brand awareness.
Ha: YouTube Red’s customer
subscriptions are dependent
upon their brand awareness.
● YouTube Red’s poor brand
awareness and promotional
efforts might be affecting the
gain of new customers and
subsequently subscriptions
○ Trying to figure out if poor
brand awareness is truly a
factor or if it’s something
else
○ Performed an
Independence test to
determine possible
association between
customer subscriptions and
brand awareness
Hypothesis 2
11. “Does adding paid services affect
consumer behavior and purchase
decisions?”
Ho: Paid services are negatively
correlated to YouTube Red’s
subscription rates.
Ha: Paid services are not
correlated to YouTube Red’s
subscription rates.
● There might be a negative
correlation between new
‘freemium’ services and YouTube
Red’s target consumer’s purchase
behavior
○ Trying to figure out if the paid
services are what is affecting
their low subscription rates the
most
○ Performed a correlation
analysis to determine the
strength of the relationship
Hypothesis 3
12. Data Collection Method
Introduction
Detailing the contents and
nature of the Questionnaire.
Screening Questions
Provides analysis of those
familiar with the product
Involving Questions
Scaled questions that help
understand likliness of product
offering
Conclusion
Final wrap up
Demographic Questions
Understanding the sample
05
01
02
03
04
14. Respondent Profile
Sample size
n = 100
[Smaller sample size than actual due to lack
of activeness in the RU group]
Response rate:
(# of people who answered the
survey/sample size * 100)
Actual Group Size:
9313 members in the 2018 RU page
(41/100)*100 = .41%
● Heard of YouTube Red via advertisements
● Even split of male and female
● Millennial
● White
● Single
● YouTube Red doesn’t have appealing offerings
● Perceptions:
○ Content should be free
○ Ad-less viewing can be achieved
through adblocker
● Adverse to paying for online streaming
services or willing to pay between $5.01-$10
● Not likely to subscribe/try the 1-month free trial
● Listening to content w/ mobile screen off
appealed the most
● Undergraduate student
● Employed at an income level of below $15,000
● From NB, NJ
Characteristics of Respondents
15. Results - Secondary Research
● An article entitled “Consumers
with a YouTube or YouTube Red
Subscription in the U.S. 2017, by
Age Group” confirms our
hypothesis and later primary
research results that Millennials
are the most likely to use
YouTube Red
● This also indicates that
Millennials are the appropriate
target market for YouTube Red
16. Results - Secondary Research cont.
● 12% of US consumers would be willing to pay to view exclusive YouTube videos
from their favorite show or stars
○ 5% in Australia
○ Across the 6 countries that were surveyed, 11% of consumers stated they
would pay for this type of service
● Most YouTube users are already paying for nearly all of the characteristics YouTube
Red is offering, just somewhere else
○ TV/film; original shows & series (Netflix, Hulu & Amazon Instant Video )
○ Ad-free music (Spotify / Pandora)
● 34% of YouTubers are using ad-blocking softwares each month and among
younger YouTubers, the figures are even higher (4 in 10 of the youngest active
YouTubers)
○ This means these users are already enjoying the perks of YouTube Red’s new
paid service for free
17. Results - Secondary Research cont.
● In 2016, the top 5 leading countries with the most active users on YouTube
were:
○ United States
○ Brazil
○ Russia
○ Japan
○ India
■ YouTube Red is currently only available in 1 of those 5 (U.S.)
● Consumers are not adequately informed about service offerings and benefits
of YouTube Red
○ Few advertisements on YouTube
○ No commercials or campaigns promoting YouTube Red
○ Few original content promotions
19. Primary Research Results (Frequency Distribution)
● Most respondents were millennials
● 54% of respondents said they would be
somewhat likely to very likely to try the
1-month free trial
● However, only 20% said they would be likely
to subscribe to YouTube Red based on the
offerings
● Most respondents were
millennials
Likely to try the 1-month free trial Likely to pay for YouTube Red after the free trial
20. Primary Research Results (Frequency Distribution)
● There is a tie between
YouTube Red being
slightly appealing and
being highly appealing
● With most responses
falling within the middle
three columns, we can
assert that YouTube red
has relatively appealing
offerings
● Could be more attractive
22. Two-tailed T-test
● P-value is less than 0.1; can reject null hypothesis
● Thus, Millennials are more likely to upgrade their YouTube subscription to
YouTube Red than older generations.
● Test is performed for two unrelated samples; means are compared to
determine if a variable affects the samples differently
23. Chi-squared - Independence Test
● How does the lack of brand awareness and promotion impact YouTube Red’s efforts
of attracting new consumers?
○ Ho:YouTube Red’s customer subscriptions are independent from their brand
awareness.
○ Ha:YouTube Red’s customer subscriptions are dependent from their brand
awareness.
● Calculated Chi-square: 0.604452
● Critical value (1, 0.1): 2.706
○ Cannot reject Ho
● Two variables are statistically independent if knowledge of one would offer no
information as to the identity of the other (i.e. one variable has no influence over the
other)
24. Correlation Analysis
● Paid services are indeed negatively correlated to YouTube Red’s
subscription rates
○ YouTube’s consumers are not used to paying for content on their
platform
26. Conclusions from Primary Research
Hypothesis 1: As a result of the Two-Tailed T-test, we must reject Ho because it
determined that Millennials are in fact the most likely to upgrade their YouTube
subscription to YouTube Red.
Hypothesis 2: Based on the Chi-Square Independence Test, we cannot reject Ho. This
means that YouTube Red’s customer subscriptions are independent of their brand
awareness.
Hypothesis 3: From the Correlation Analysis, we cannot reject Ho and YouTube Red’s
paid services are indeed negatively correlated to their subscription rates.
27. 1. Set the price point
lower
A. Most respondents said they
were against paying for
YouTube Red & most of those
who said they would pay for
a streaming service said
they’d pay between $5.01 -
$10
a. We suggest $5 or less;
offer a college student
discount (Spotify)
2. Offer more
appealing options
A. Create more exciting original
content to compete with shows
such as Stranger Things, Game
of Thrones, Orange is the New
Black, etc.
a. R&D into directors and
producers
b. Offer television shows
and movies other than
YouTube Red original
content
i. Viewers want to be
able to watch their
shows all in one
streaming service
3. Expand to
Different Countries
A. Expand its services into
countries with high
YouTube viewing rates
such as Brazil, Russia,
India, China, etc.
a. Personalize
viewing content
depending on
location
Recommendations
28. Work Cited
● “Consumers with a YouTube or YouTube Red Subscription in the U.S. 2017, by Age Group.” Statista, Mar.
2017, www.statista.com/statistics/698201/youtube-or-youtube-red-subscription-by-age/.
● Contributor, Neustar. “NeustarVoice: The DDoS Attacker Is Gaining Advantage.” Forbes, Forbes
Magazine, 26 June 2017,
www.forbes.com/sites/neustar/2017/06/26/the-ddos-attacker-is-gaining-advantage/#34f8b4c02c36.
● “Leading YouTube Markets 2016 | Statistic.” Statista,
www.statista.com/statistics/280685/number-of-monthly-unique-youtube-users/.
● McAlone, Nathan. “What Your Favorite Streaming Service Says about You - from Netflix to HBO to
Hulu.” Business Insider, Business Insider. 14 Mar. 2017.
● Mulligan, Tim. “How Well Is YouTube Red Really Doing?” MIDia Research, 1 June 2016,
www.midiaresearch.com/blog/how-well-is-youtube-red-really-doing/.
● Perez, Sarah. “Netflix Reaches 75% of US Streaming Service Views, but YouTube is Catching Up.”
TechCrunch, TechCrunch. 10 Apr. 2017.
● “YouTube Red.” Wikipedia, Wikimedia Foundation, 21 Nov. 2017,
en.wikipedia.org/wiki/YouTube_Red#cite_note-1.
● “YouTube Red’s 3 Challenges and Its 1 Big Advantage.” GlobalWebIndex, 13 Apr. 2017.