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YouTube plans to launch pay-TV channels by Q2 2013

by Mark Tyson on 30 January 2013, 10:00

Tags: YouTube (NASDAQ:GOOG), Google (NASDAQ:GOOG), Netflix, Amazon (NASDAQ:AMZN), Hulu

Quick Link: HEXUS.net/qabr6b

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Some channels on YouTube will become paid-for subscription channels according to a new report on Advertising Age. Its sources say that YouTube execs have reached out to several channel producers asking them to submit applications to create paid-for channels. Subscription charges are likely to be in the range of $1 to $5. Further monetisation is expected by the online video giant as it may start charging for video content libraries and live event streaming.

The channels which will be involved in the first wave of the paid subscription rollout, expected in Q2 2013, is as yet unknown. AdAge speculates that “YouTube will lean on the media companies that have already shown the ability to develop large followings on the video platform, including networks like Machinima, Maker Studios and Fullscreen”. However YouTube is also looking beyond existing partners for quality content producers.

H+ YouTube series made by Warner Brothers

Currently YouTube only makes money from advertising revenue. The site was a well known money pit for owners Google and has only recently started paying its own way. As with its advertising revenue sharing, the site is expected to split profits from the subscription fees with partners 55:45 in the content creator’s favour.

The FT garnered a quote from a YouTube spokesperson about the subscription model; “We have long maintained that different content requires different types of payment models. There are a lot of our content creators that think they would benefit from subscriptions, so we’re looking at that.”

Other big players in the online video market are said to be creating original content, attacking the same viewing market from a different angle. Netflix has commissioned a $100 million adaptation of the BBC’s “House of Cards” and Amazon and Hulu are also creating product differentiating original programming.

TaiwanDuck TV channel

AdAge reports that the initial paid-for offerings will only number about 25 channels. It has asked current partners to be careful not to alienate their existing free-subscriber base which may have taken years to build up.



HEXUS Forums :: 9 Comments

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Paid channels on YT are fine in my book, just as long as some of the existing content isn't “persuaded” to move to them, and no adverts on the paid-for content. The latter really annoys me about some Android apps - you pay for them and they put up ads too.
It would be really lame though if all these media companies charge subscriptions just to listen/watch music and music videos… Especially since you would need multiple subscriptions for different music labels etc…

And there is no doubt that these companies have already thought about this. It's just another way to squeeze money out of the public.

It would also alienate 99% of viewers.
I do think it's a good idea though! It would help fund talented individuals to keep producing great entertainment. I imagine it is quite expensive to produce quality videos. Also having some well-known satellite channels that you can view all over the world without a hefty satellite subscription would be a plus!

However as I said it does allow greedy media companies to needlessly charge for content like music videos. It's not like they don't already have money piling in from record sales, downloads and events…
smithy1158
I do think it's a good idea though! It would help fund talented individuals to keep producing great entertainment.

However as I said it does allow greedy media companies to needlessly charge for content like music videos. It's not like they don't already have money piling in from record sales, downloads and events…
First para - good point. It also might be a way for stuff that's not “commercial” enough to get done. Bit of a bug bear of mine that there's perfectly popular shows that get cancelled because they're not “commercially appealing” so none of the US networks pick them up.

Not that bothered about the music video's angle. I can't remember I saw a video for a current track and thought “oo, I'd like to see that again”. Then again, I don't go in for these “live concert” DVD's much either.
Sounds like the “Cocaine Dealers Business Model” I read in the Financial Times.

Get people hooked by offering free goods, kill off the competition, then slowly make the addicts pay knowing full well they have no alternative but to pay if they still want any similiar level of high.

Not that I'm bothered, I wont subscribe to watch the usual uploaded rubbish since I rarely watch it now while it's free, but if they are offering premium shows that are original like HBO and Sky Atlantic do, then I'll happily subscribe to a series.

I'm sure it will be cheaper than NetFlix / LoveFilm / Sky and I'll be able to choose what to subscribe to and what not depending on MY preferences, not just what they can get blicenses for.