YouTube Close to Launching Paid Channel Subscriptions (Report)

5:53 AM PST 05/06/2013 by Georg Szalai

Charging subscription fees will allow the online video giant owned by Google to add a second revenue stream.

YouTube is close to launching paid subscription offers that the Google-owned online video giant had been expected to start offering eventually.

The new a la carte subscription plans for for some of its professional video channels could be announced as early as this week, the Financial Times reported.

Charging subscription fees will allow the online video provider to add a second revenue stream and help finance a broader content offer.

As many as 50 YouTube channels will be available via subscription for as little as $1.99 per channel per month, according to the FT. Previous reports had suggested subscription prices could be as high as $5 per month. YouTube and the content creators would share the revenue.

The FT didn't detail which channels may be offered via subscription plans. But it said the subscription service will allow YouTube channel operators to produce different content, such as TV shows and films.

Industry observers will watch closely for any signs of how the subscription offers affect pay TV providers, as well as usage and growth at online streaming giants Netflix and Hulu.

A YouTube representative told the FT that the video site had "nothing to announce" regarding subscription offers but was "looking into creating a subscription platform that could bring even more great content to YouTube for our users to enjoy and provide our creators with another vehicle to generate revenue from their content beyond the rental and ad-supported models we offer."

YouTube has focused on expanding beyond user-generated content to include professionally produced video. Over the past 18 months, it has invested more than $200 million in dozens of channels for such celebrities as Madonna, Jay-Z, Ashton Kutcher, Sofia Vergara and Shaquille O'Neal.

With the help of the channels, YouTube's audience has expanded to 1 billion users, and the site has brought in more advertising revenue. "We're seeing a myriad of brands increasing their media spending," Robert Kyncl, global head of content partnerships for YouTube, told the FT.

Hollywood conglomerates -- from Time Warner to Comcast/NBCUniversal -- have also invested in companies that produce or aggregate YouTube content. Just last week, DreamWorks Animation said it has agreed to acquire teen-focused YouTube network AwesomenessTV.

Email: Georg.Szalai@thr.com
Twitter: @georgszalai
 

comments powered by Disqus