The YouTube Experiment: Paid Subscriptions

February 1, 2013

youtube, youtube channels

YouTube is looking to experiment with a new revenue strategy. Ad Age reports the online video site is prepping to launch paid subscriptions for individual channels. It’s a strategy that has the potential to lure ad dollars and content producers from traditional TV right on over to YouTube.

YouTube is said to have reached out to a “small group” of channel producers asking them to create channels that users would have to pay to access. T.C. Sottek for the Verge notes this initial group is not expected to exceed 25 channels. However, these subscriptions might not be restricted to channels. Rumor has it the video service is looking into charging for its libraries of content as well as access to its streaming of live events. For now, it looks like these fees will be somewhere in the neighborhood of $1 - $5/month.

How will YouTube decide which channels become part of this subscription service? Well all of this is a little unclear. It is believed that YouTube will look to media companies that have already succeeded in developing a large following on the video sharing site. This is said to include high performing channels such as Machinima, Maker Studios and Fullscreen. YouTube may also tap into a new market as it is reportedly seeking content providers outside the realm of its current list of partners.

So, why didn’t YouTube think of this before? Actually they did.

Seth Fiegerman from Mashable explains this really shouldn’t come as a surprise, noting that the effort is an experiment that YouTube has been looking into for a long time. In the last year, YouTube CEO Salar Kamangar teased the idea several times.

Kamangar has even been open in discussing his vision for the experiment. He describes it as a way to give networks a more direct line to their target audiences at a much lower cost. Without an audience, a network lacks the ability to acquire subscription fees from distributors, but YouTube just might have a solution. Content providers will reportedly have the option to include ads in these paid channels just as unpaid channels do. YouTube’s ad revenue could be just the right source of cash these content providers have been looking for.

If a network can’t attract an audience on Cable TV how will this play out differently on YouTube? Truth be told people look for different content in different places. You might go to Netflix to watch that movie you missed in the theater, Hulu to catch up on your favorite TV show, and YouTube? your go to for Justin Bieber’s latest music video. But, YouTube’s subscription strategy could mean so much more for the ever so popular video sharing site.

Paying for content isn’t a completely new idea either, as YouTube has already been offering pay-per-view content such as television shows and movies, but a writer for the Verge says, “These subscriptions would make YouTube more of an ‘a-la-cart ’content provider”. So, a place for tailored interests to thrive, a place for content that has gotten lost in the cluttered world of cable TV.  

YouTube’s pay-per-view offering proves its success at charging for content, but one major question remains. Is this the sort of content people are willing to pay for? More importantly, does this take away from what we all loved about YouTube in the first place?