Some channels on YouTube will become paid-for subscription channels according to a new report on Advertising Age. Its sources say that YouTube execs have reached out to several channel producers asking them to submit applications to create paid-for channels. Subscription charges are likely to be in the range of $1 to $5. Further monetisation is expected by the online video giant as it may start charging for video content libraries and live event streaming.
The channels which will be involved in the first wave of the paid subscription rollout, expected in Q2 2013, is as yet unknown. AdAge speculates that “YouTube will lean on the media companies that have already shown the ability to develop large followings on the video platform, including networks like Machinima, Maker Studios and Fullscreen”. However YouTube is also looking beyond existing partners for quality content producers.
H+ YouTube series made by Warner Brothers
Currently YouTube only makes money from advertising revenue. The site was a well known money pit for owners Google and has only recently started paying its own way. As with its advertising revenue sharing, the site is expected to split profits from the subscription fees with partners 55:45 in the content creator’s favour.
The FT garnered a quote from a YouTube spokesperson about the subscription model; “We have long maintained that different content requires different types of payment models. There are a lot of our content creators that think they would benefit from subscriptions, so we’re looking at that.”
Other big players in the online video market are said to be creating original content, attacking the same viewing market from a different angle. Netflix has commissioned a $100 million adaptation of the BBC’s “House of Cards” and Amazon and Hulu are also creating product differentiating original programming.
TaiwanDuck TV channel
AdAge reports that the initial paid-for offerings will only number about 25 channels. It has asked current partners to be careful not to alienate their existing free-subscriber base which may have taken years to build up.
