How Paid YouTube Subscriptions Will Affect Your Video Watching Experience

May 10, 2013


YouTube announced Thursday that it will now offer new paid-subscription channels, which will allow channels to charge viewers for watching its content. The first channels to try out this new feature include the producers of Sesame Street, Ultimate Fighting Championship and PGA Digital Golf Academy. This new YouTube option will transform the website.

Here’s what you need to know about the new feature:
  • Subscriptions will start at 99 cents a month with some channels offering a discounted rates for annual subscriptions.
  • Each channel will have a 14-day free trial
  • Paid channels begin rolling out immediately, the company said, and will be available more broadly to a number of YouTube content creators over the “coming weeks.”
  • Users will be able to access the paid channels on a variety of devices, including their computers, phones, tablets and televisions. The company said that it will make subscriptions available on more devices in the future, but did not offer further details on those partnerships.
  • Video makers will soon be able to set up their own paid channels using YouTube’s infrastructure. In a conference call for reporters, Malik Ducard, the director of content partnerships for YouTube, suggested that this “self-service feature” was the most important piece of the announcement.
So what does this mean for your video watching experience?

It will improve the quality of original content by making the site more of an entertainment destination, rather than a place that users stop only to see the latest music hit or viral video. The revenue that companies have the potential to generate from paid channels may also give them the opportunity to offer subscribers more than just access to premium video. YouTube stated in its announcement that they are looking forward to seeing how the channels will reach their fans in a new way.

Some feel that instead of improving the video-watching experience, that the new paid-subscription option will limit and hurt viewership of channels and shows. Hank Green, who for years has run YouTube educational channels on topics including science, says, "online video, when it comes down to it, is about sharing, and you can't share something behind a paywall. That's hugely limiting."

How will this affect the video-sharing market?

While there are only a small group of partners that will offer paid channels on YouTube, video-streaming sites like Netflix and Hulu need to keep their eye on this new feature. If more channels catch on to this new trend, than some users could switch from Netflix or Hulu. However, some analysts said YouTube's prices might be too high. The company's new paid channels make Netflix's $7.99-a-month subscription price for thousands of movies and TV shows look "amazing" by comparison, said Rich Greenfield, a media analyst at BTIG Research.

YouTube’s new feature is also an attempt to attract advertising dollars and shift them away from traditional TV. YouTube declined to say exactly how it would split the revenue from paid subscriptions with the producers of channels. As of now, it keeps 45 percent of the revenue from the ads it sells and gives producers the rest.