YouTube Launching Paid Subscription Channels, Report Says

Image: YouTube Launching Paid Subscription Channels, Report Says

Monday, 06 May 2013 10:54 AM

By Megan Anderle

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YouTube will launch a paid subscription model for its specialist video channels, possibly this week, according to the Financial Times.

Viewers will be able to subscribe to as many as 50 YouTube channels for as little as $1.99 each a month, insider sources say. The move will provide an additional revenue stream for the video-sharing giant, which currently uses advertisements in the beginning of videos that have thousands of hits.

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The move has been in development for months, and the revenue will help finance a wider range of content, such as television shows and films, an anonymous source close to the Google-owned company said.

A YouTube spokesperson told FT the company has "nothing to announce at this time" 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."

Advertising on YouTube and rival video sites has grown swiftly and substantially, but it is still pocket change compared to what cable networks bring in with advertising.

Digital video advertising will jump from $2.93 billion to $4.14 billion in 2013, eMarketer estimates, but this will only account for 2.4 percent of all ad spending.

YouTube claims most of that revenue. Brian Wieser at Pivotal Research estimates that YouTube's ad revenues will rise from $1.3 billion in 2012 to $2 billion this year. Bernstein Research said on Friday that its revenues could exceed $15 billion "in the next several years", roughly matching CBS or Viacom, FT reported.

These cable and satellite channels have been eyeing YouTube's subscription service to generate revenue from older shows and new programming, according to another source.

Rumors have been circulating for awhile that YouTube has been looking to generate revenue this way. In January, AdAge reported that the site asked a small group of channels to apply to be among those paid.

"We have long maintained that different content requires different types of payment models," a spokesperson told Ad Age. "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."

There have been other signs indicating the company will create subscription-based channels. Mashable reported that two lines of code accidentally appeared in YouTube for Android referring to paid channel subscriptions. The code said "You can only subscribe to this paid channel on your computer," and "You can only unsubscribe from this paid channel on your computer."

Recently, YouTube surpassed the 1 billion unique monthly viewers mark, the same number of users Facebook has.

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