In Quest for New Revenue, YouTube Reportedly Launching Paid Subscriptions


Continuing its aggressive push to convince the world that YouTube video content is better than TV, the online video giant is rumored to be launching paid subscriptions for specialist video channels as soon as this week, the Financial Times reports.

YouTube has said it 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.” 

The preeminent global video site has long-since evolved from its user-generated roots into a platform that every major company and marketer is looking to leverage with professional-grade content. With an audience of one billion, YouTube and its content partners are looking to create another revenue stream besides the site’s burgeoning ad platform. “This is a whole new form of content, content delivery and content consumption,” said DreamWorks CEO Jeffery Katzenberg in Business Insider. “It’s the medium of the future and the future has already arrived. Video is becoming the global shared experience.”[more]

Rumors began circulating in January after the site reportedly asked a handful of content creators to sign-on for the subscription plan. At the time, a YouTube rep told Mashable, “We have long maintained that different content requires different types of payment models … The important thing is that, regardless of the model, our creators succeed on the platform. There are a lot of our content creators that think they would benefit from subscriptions, so we’re looking at that.” 

In March, YouTube VP Robert Kyncl said subscriptions were “incredibly important” as a tool to create “additional revenue streams” for content creators, as the site had already hinted at the service through code references in its Android app, which were uncovered in February, The Verge reports. Additionally, the company has dedicated $200 million in marketing dollars to promote original YouTube content. 

Subscriptions, which will reportedly cost as little as $1.99 per month and affect up to 50 channels, will create additional revenue for dedicated content creators and may spur the introduction of TV-like series and films produced solely for YouTube. Current channel partners include WWE, The Onion, Machinima and more. It is becoming increasingly evident just how vital a presence on the network is, as Time Warner, Discovery Communications, Comcast and others have invested in creators and aggregators of YouTube content. Even companies engaged in traditional media are looking to leverage YouTube’s growing user-base. DreamWorks Animation, the studio behind hits like the Shrek franchise, recently purchased YouTube’s teen-focused Awesomeness TV for $33 million.

The rumored subscription plan will put YouTube in direct competition with streaming services like Netflix, which is now at 30 million subscribers, and Hulu, which just passed 4 million. However, YouTube isn’t the only one that is looking to tear eyes away from traditional TV programming, as Netflix recently launched its second original series, Hemlock Grove, after the steady success of House of Cards. The service also worked out a deal to produce another season of cult favorite Arrested Development, which it will stream exclusively starting in May.


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