YouTube Economics: The /DRIVE+ Paywall

The /DRIVE network has recently moved to a new financing model. They were originally funded by YouTube as part of its Original Content program: they received a fixed amount of cash to produce car films and gave up their share of the ad revenue in exchange. Unfortunately, that didn’t work out very well for Google’s video service. At least for the automotive channels, it cost them money they apparently didn’t make back, which is why the channel was cut loose. According to the folks over at /DRIVE, it was paywall or funeral for them.

This is where a fun internet experiment started. While it isn’t a comfortable situation for anybody directly involved, it surely will be interesting to follow and there have already been a couple of rather interesting twists I will address a bit later.
Matt Farah, one of the /DRIVE network’s hosts and part-owner of The Smoking Tire, has quite openly explained on The Hooniverse’s podcast how YouTube revenue works for the people who provide the content. It is not at all pretty if you need an actual budget to produce the videos. He has also done the math on reddit to show just how difficult it is. /DRIVE’s average video gets as many as 400.000 views – which is a lot for automotive content – and after YouTube and Uncle Sam take their cut, they are left with $720 in the bank. That is awesome if all you’ve done to earn that money is review or simply play a video game. It is truly horrible if producing the film costs you three times as much, meaning you have to rack up 1.2 million views just to get even. That doesn’t happen too often with car videos.
Freemium and NBC Money
Multiple income streams are therefore necessary to make a YouTube channel like this work. The way /DRIVE now compensates is by producing a TV show for NBC Sports and putting a fair share of their videos on their paid subscription channel /DRIVE+. When they first started asking for money, shorter versions of all of their videos were released on the regular channel which resulted in a lot of viewers moaning and whining in all of /DRIVE’s comments sections, be it on YouTube, Facebook or Twitter. The commenters felt the short versions were a mere teaser to get people to sign up for their new service. “Greedy” is a term that came up frequently.
Interesting Twist #1
Chris Harris – viewer magnet and very important piece to the /DRIVE+ puzzle – left the network to start his own, completely free-of-charge YouTube channel a mere two months after switching to the new financing model. He will still be with the company as he is a part-owner, but if and how he will continue to contribute has not yet been revealed.
This, again, caused many comments that weren’t exactly music to the producers’ ears. This time around, they weren’t full of ignorant BS but just not good news: people were cancelling their subscriptions because they had only come for Harris’ content. It felt like /DRIVE would finally fall apart. But as is often the case, one closed door opens another, and most importantly, internet comment sections aren’t often frequented by the happy customers.
Now, a few months later, it feels as though everything is on an uptick over at /DRIVE. They installed a new concept where they produce three videos each week and put the full length version of one of those videos on their free channel while they have a TV-style 30 minute program consisting of three films on their subscription one. In fact, J.F. Musial – part-owner of the network – said that paid subscriptions have been going up ever since they stopped promoting the paid content in their free films. Make of that what you will; I certainly have trouble connecting the dots on that one.
Interesting Twist #2
The minute Harris left /DRIVE as a host, Matt Farah was looked upon to be their new “top dog”. Accordingly, assignments previously given to Harris are now popping up in Farah’s mailbox, in fact, he’s now got two segments on the channel: /Tuned, and the new one, /Matt Farah on Cars.
Okay, so the dude responsible for the three most successful videos on the network (none of which have a big car name attached to them like let’s say McLaren P1 or LaFerrari) is now the guy; big surprise.
It’s the implications that make this thing even more interesting than it was. Because the The Smoking Tire-crew is now busier than ever shooting films for /DRIVE, they have less time to release videos in their own neck of the woods on YouTube. Except that is not what’s happening at the moment. As a matter of fact, they’ve quite severely ramped up their output to two videos every week.
How is that possible? They lowered the production value from “this is far better than most of the car shows on TV in every way” to more common internet standards. They call it a One Take series, which is an unedited film of Farah driving cars – mostly provided by fans of their show – up and down a canyon with a couple of GoPro cameras attached to the vehicle. This way, production costs are at the bare minimum: he shoots them alone, there is no real post production, and a few hours are enough to shoot quite a few of them. The finished product still works because it showcases Farah’s talent to entertain his viewership, but at the same time it takes away the creativity the entire TST team puts into their high quality films. TST confirmed they will also continue to release some of the good stuff on their channel, but it will be at a reduced rate. It’s a good thing then that Farah’s crew – consisting of Zack Klapman, Thaddeus Brown and Tom Morningstar – work on many of the /DRIVE productions.
Chris Harris vs /DRIVE
The constellation, as it currently stands, makes for a potentially very awkward situation. Harris was the guy to drive the really big fish in the business such as the hyper-hybrids by McLaren, Porsche and Ferrari. I would very much assume he will continue to get those opportunities with his own channel, but what about his old shop? The next release of a high-caliber European sports car will show if they were granted access to those big events because of Harris or the actual /DRIVE brand.
The Smoking Tire vs … The Smoking Tire
Another interesting aspect is whether or not the The Smoking Tire‘s extended commitment to the /DRIVE network will be done at the expense of their own brand’s growth. Judging from the last three months, it appears no such thing will happen. As a matter of fact, the One Take segments are generating rock solid numbers. Relatively speaking, they outperform most of the high quality films with ease and they come in much greater quantity. It’s what Farah calls “internet for the internet” rather than “TV for the internet”: greater quantity and a more appropriate quality standard matching the expected financial gain.
Case Study: Everyday Driver
The guys behind Everyday Driver, Todd Deeken and Paul Schmucker, have been running their channel since 2007. They are closing in on 90.000 subscribers and 18 million views with their catalog of around 130 videos so far. Because they have been at it so long and only upload AAA content to their channel, they generate an above average income per 1000 views, even when compared to other premium channels. But because they have so far refused to produce content of a somewhat reduced quality, they simply haven’t created enough content to earn sufficient money to put roofs over their heads exclusively with YouTube money, meaning they must also hold down regular jobs.
In an effort to generate additional income to finance more films, they have created additional revenue streams. They started a podcast and produce feature-length films to sell to customers directly via Vimeo and Amazon as well as license to TV stations. Plus, they have set up an account on Patreon.
Patreon, unlike Kickstarter, offers the opportunity to consistently support content creators in their ongoing endeavors. You commit to donating an amount of your choosing every month rather than a one-time donation.
So far, 48 people have committed to donating $232 to Todd and Paul on a monthly basis. Chris Harris, too, joined the platform and has since racked up a whopping $4820,10 a month from 1140 patrons.
YouTube as a primary Source of Income
There is a very obvious difference in popularity between the two channels. To be fair, there is a vast difference every time anybody is measured up against Chris Harris. He is the internet’s Jeremy Clarkson. Everybody loves him.
But if the quality content Paul and Todd create isn’t enough to earn a sustainable living, what is? The free version of /DRIVE with or without Chris Harris wasn’t and isn’t enough. The Smoking Tire in full quality beast mode isn’t enough. Chris Harris on Cars without additional sponsorship isn’t.
Now, both Harris and Farah could most likely earn a good living doing tons of One Take type of videos. But that is a) not at all what they are about and b) they would have to fire their long-time companions who film and edit the videos.
The Conclusion
High quality car films are not even close to being profitable when financed exclusively via YouTube ad revenue. Cars are way too much of a niche; they simply don’t have the reach of video game coverage, prank clips, Korean music videos and most certainly not that of cats. Cats beat the shit out of the YouTube servers any day of the week. Go to YouTube, type in “cats”, sort the results by the most views and on page 26, you will find it: the first cat video with less than a million views.
What about MotorTrend, Evo, Autocar…
When it comes to channels backed by large print magazines, the truth of the matter has got to be that not losing too much money is the primary objective at hand. It is what the parent companies use to promote the magazines. Additionally, the hosts are already on the payroll anyways, plus they have entire departments whose only job is to sell ads.
While I certainly think all of those channels produce a lot of very nice content, they never even try to form a story around the car videos they produce. I love that in a video, which is why I am a complete fanboy of The Smoking Tire and massively excited when I heard Alex Roy would return to /DRIVE.


Niche in a Niche
Because the overall audience interested in car-related videos is ultimately rather low and the majority seems to be just as happy with content produced by said print magazines, the ones that do appreciate a good story now have to cough up a few coins to keep the good stuff coming.
I don’t see a problem with that at all. I think way too many good things on the internet are free that shouldn’t be. On the other hand, I’d rack up quite a bill if all of the internet outlets I wouldn’t want to miss started charging for their content.
Without making this an entirely new subject, let me just say this: if quality on the internet always had a price tag, the internet would be a better place for it. Think of all the stories no one is touching because they would cost money.
What’s my Point?
Even though I have already hammered out around 2000 words, I have only touched on most aspects that are important when discussing this subject. I hope the provided information will encourage you to discuss the matter with the other hoons.
My closing comments: paying money for quality entertainment is quite alright. Ad blocking hurts free content. Also, when was the last time you supported Jeff and the guys? Find t-shirts and other merchandise here. [Editor’s Note – Hey we know you love us – JG]

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  1. Bradley Brownell Avatar
    Bradley Brownell

    I’ve been a /Drive+ subscriber from the start. Their efforts are worth four bucks a month. It’s one dollar an episode. I’ve paid more than that for garbage on Amazon I don’t even (comparatively) care about.

  2. William Robinson Avatar
    William Robinson

    My original take on these channels branching off into paid content was that they did it for the cash… Now having it explained that they were in fact not really making much from you tube puts this in a whole new light. Thanks for taking the time too explain this.

  3. JBsC6 Avatar

    Interesting perspectives and information on various business models…food for thought without question.

  4. Mr. Jones Avatar
    Mr. Jones

    Question is, are they still on good terms with Chris? From what I understand, Harris was the one who pushed the pay model on them, and now he left. I wouldn’t even be surprised if they end up suing CH. FWIW, he built his reputation on/through free media.
    Have they thought about selling merchandise? Like the annoying orange gummy bears. Doesn’t Matt have a few cats? Incorporate them into some of the videos. He did make some specials like All Cars Go to Heaven, similar to the Everyday Drive business model.
    Another problem is that Drive wasn’t very upfront when they started the pay model. JF & co. should’ve told us, as soon as Google stopped funding them, that they lost that source of income. Unfortunately, they took too long to do so, and when it finally happened, they weren’t the most professional and cordial to their fans/customers.
    Don’t forget about Regular Cars. He used to work a real job in addition to RCR, but with Kickstarter, he was able to quit his regular job to focus on RCR full time. And what’s wrong with holding regular jobs, anyway?

    1. Sjalabais Avatar

      “Cats and boobies”-elements/teasers in car videos might have a momentary impact on viewership, agreed. But it would dilute otherwise straightforward content.

  5. Owen Hughes Avatar
    Owen Hughes

    I’m a subscriber.
    Just thought I’d throw in my tuppences worth on a couple of things –
    I think the one take stuff probably does well because Matt is an entertaining presenter. It’s interesting because the production value is very similar to something like RCR but it doesn’t really detract from why I am watching.
    It’s interesting how much hate the Drive Plus thing generated.They did explain that they were losing money on those vids, but people just didn’t believe them or else had some deep rooted objection to paying for content.

  6. Brad Tonkatruck Avatar
    Brad Tonkatruck

    This was a great write up on what was and is going on. I think as a fan we were left in the dark for so long as to what was happening when drive went “off the air”. I understand with my head that they don’t owe us anything by way of a explanation, however, more comutication would have been nice. It has been a few months now and things seem to have calmed down.
    I don’t feel like I am missing out on anything by not going with Drive+. I like Matt F. and these one takes are great because of the raw feel and the chance to see a large variety of cars. CH on cars are great because of the geeky detail he goes into, and how exited he is when talking about them.

  7. Sjalabais Avatar

    Plain fantastic article – so much insight into a very special world. Chris Harris really knows how to talk and how to keep his audience’s attention. I have mixed feelings about him leaving, as he obviously puts his own brand – himself – first, yet he ultimately needs to earn a living, too. On Farah’s part, putting out three and two videos a week honestly sounds like quite the workload.
    When it comes to the audience…Top Gear going up in flames might be a watershed – either car videos become even more of a niche, or the vast audience of TG spreads out to niche offers, making them all more viable.
    Personally, I hardly ever watch any videos with sound; not on the Hooniverse either. As a busy family father, I just don’t know how to do that. A couple of minutes here and there to read and, occasionally, comment work nicely, but video with sound (as opposed to watching silent Russian dashcam videos while I put my kids to sleep or on public transport etc) rarely happens. RCR is quite short and funny enough so that I’ve watched maybe 10-15 of them…
    And ad content…on the PC, I’ve had ABP and Ghostery on forever. Blinking, websitebreaking, dominating and falsely content-y ads are way too many to swallow. I think I’ve not once seen a Youtube ad I wanted to click on. Coming here, 9 out of 10 visits happen on the phone, without ad block of any form – but, honestly, can’t say I’ve seen anything to click on here either!?