Google set to charge subscriptions for special YouTube channels

Since January this year, the media industry’s rumour mill has been aflutter with suggestions of the impending possibility of paid-for subscriptions for certain YouTube channels.

by WAN-IFRA Staff | May 6, 2013

According to the Financial Times, this development “could be announced as early as this week” and looks set to offer users the opportunity to subscribe to a range of 50 YouTube channels for as little as $1.99 each per month. This latest impending move by the Google-owned video market leader is potentially revolutionary, since it promises to “finance a broader range of content and add a second revenue stream” to YouTube.

YouTube currently claims the “lion’s share” of digital video advertising revenue which, according the Financial Times, “has risen fast,” predicted by eMarketer to jump from $2.93bn to $4.14bn in 2013, but “remains a fraction of television budgets” and accounts for just 2.4 per cent of all advertising spending. The subscription model would act as another, hopefully more lucrative vehicle for YouTube creators to monetise their content, something which is currently achieved through two main models: a rental system and digital advertising.

Since its early days, YouTube has evolved from a platform for amateur user-generated content to a site for professionally-produced content such as music videos and film trailers, to select but two of many examples. The Financial Times reports that “in the past 18 months it has spent more than $200m on advances to dozens of start-up channels.” YouTube feels that their its subscription platform “could bring even more great content to YouTube for our users to enjoy” – channel operators could branch out and produce different content, such as new TV shows and films, following in the footsteps of Netflix, a leading subscription-only streaming site which has gone on to produce its own high-quality original programs.

However, it is not only television channels that ought to be getting excited about this new business venture. The impending launch of YouTube channel subscriptions will also provide food for thought for the newspaper publishing industry, since it could finally provide a solution for publishers wondering how to most effectively make money out of the leading online video platform. Undoubtedly, YouTube is already useful for news publishers wishing to make their content go viral (the Guardian, for example, currently has an extensive YouTube network). It is indispensable as a tool of mass distribution, but one which many in the news industry are currently reluctant to use since it also presents something of a financial threat: if their content is freely accessible on YouTube, then it becomes near impossible for them to charge for this content elsewhere.

Currently, news publishers can look to YouTube for its advertising revenue. For example, they might choose to post videos with pre-roll advertisements which have proved more lucrative than simple banner advertisements – advertisers are willing to pay more for them since they know that users will have to watch them – and thus are a one of the driving forces behind newspaper publishers’ willingness to produce more video content. The notion of having a pay-to-subscribe YouTube channel is surely another, far more persuasive, motivator for newspaper publishers to expand to video. It promises a new and exciting opportunity for generating revenue from news content, and is a chance for newspapers to to branch out onto a massively popular platform that is shared with many other digital partners in a variety of industries.

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