(This is a business case study. It will be used to guide discussions during the session: “The Tube Landscape in 2018″ with co-host Steve from Blacked at the Paysite Meetup.)
Steve popped a bottle to celebrate 2018 and watched as the cork careened around the room. It finally landed under a couch. He decided he would find it later.
The next morning as he was cleaning up he got into a reflective mood. 2018. New year. What would it bring?
He thought about how the rules that were changing, each shift creating risks and new opportunities. Almost 20 years earlier, on October 28, 1998, the Digital Millennium Copyright Act (DMCA), created the foundation for the Tubes. Would the Tubes make it to the 20th anniversary of DMCA as the dominant force they have been for the last couple of years? As Steve looked at the new rules coming into effect he wasn’t so sure. These new rules would certainly force changes to the Tubes. And they were all good for Paysites. There were four main rule changes he was watching.
Google’s changing approach to ads
Google and Microsoft are introducing a new policy through their browsers. They are deciding which ads will be too intrusive or abusive (pop unders, density, etc.). They are trying to slow down the introduction of ad blockers. If a site doesn’t comply they will block every ad a site.
No tube is currently compliant. Being compliant could drop ad revenue for tubes by 30%.
General Data Protection Regulation (GDPR)
This new rule limits the amount of data that companies can collect on users. It will drop revenue for ads since they will not be as targeted. Ads will become less efficient. This rule goes into effect in May.
Everyone is watching the UK. Mandatory age verification could force all adult content behind a wall. This will have a huge impact on the free model of the tubes.
This could lead to ISPs charging tubes to continue the status quo…or slow them down to the point where they are not interesting for consumers.
Steve considered the implications. For tubes to make up for lower revenue they will need to have attractive premium sections. Those sections will rely on partnerships with content producers. This may shifts power back to content producers. Users will have less free content.
It all looks good for paysites, thought Steve. Big changes ahead.
Questions for discussion:
- How can you prepare your company for 2018?
- Paysites have been at the mercy of tubes and now the dynamic can change. What does that mean for you?
- If Tubes are going premium, then what terms and circumstances are we willing to agree to in this case to make it a mutually beneficial relationship?