YouTube to Introduce Subscription Option

May 7, 2013

youtubeiconThe New York Times reports that YouTube is planning to announce a subscription option for some of its content this week. Select partners will be able to charge a monthly subscription to users who wish to view their channels. While the vast majority of YouTube videos will remain free, the plan is seen as a way to let YouTube’s partners tap a new source of revenue. The subscription channels will be more like video libraries than traditional television channels.

According to people who are familiar with the plan, subscription channels will encompass many topic areas, including entertainment, children’s programming, and music. Some partners already have plans to operate channels that specialize in old episodes of TV shows. Depending how this develops, it could lead to an interesting competition with Netflix, Amazon, and Hulu. Currently on YouTube, full length episodes and movies are rare as they are typically flagged for copyright violations quickly. However, given the subscription model and some copyright holders may well become more interested in having their content on YouTube, albeit behind a pay wall.

Some partners have expressed frustration with the ad-based revenue model that YouTube presently employs and relatively small amount of revenue that it generates. By giving its partners a subscription option, the company may help some boost their revenues; however, it remains to be seen how much of an effect it will have. Are people going to be willing to pay for subscriptions? YouTube executives have downplayed the short term importance of paid subscriptions and it is viewed by some as a means of placating upset YouTube talent.

Not all partner are clamoring for a subscription option. Several popular video publishers for the site have passed on the subscription trial. At the same time, a number of partners plan to begin promoting their channels on Thursday. It will be interesting to see how this market develops, what kind of data YouTube releases regarding revenue from subscriptions in coming months, and whether it leads to more content being available on the site. For further info, see YouTube Is Said to Plan a Subscription Option.

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