Google Prepares YouTube For Paid Subscriptions

Video-sharing service introducing new method for monetizing premium content.

 @YannickLeJacq
on January 30 2013 11:28 AM

Google (NASDAQ:GOOG) is reportedly in talks with content creators to begin charging viewers for access to their YouTube channels or individual videos, according to a report from Ad Age.

The company has reportedly asked for proposals from a handful of video producers for new YouTube channels, charging anywhere between $1 and $5 a month, the Financial Times reports, though Ad Age also invited the possibility that YouTube users could potentially pay a small fee for piecemeal consumption -- say, a few cents for a single view.

YouTube is planning to launch around 25 paid channels at first, though it’s unclear if subscriptions to the channels would be purchased individually or as a cable-type bundle for access to the website’s new premium content.  

A YouTube representative was not immediately available for comment.

Reports indicate that Google is hoping to this new monetization model in 2013.

Unnamed sources told the Wall Street Journal that “YouTube also hopes that owners of struggling cable-TV channels might opt to move their content to YouTube.”

YouTube currently offers video games in a manner similar to some of Amazon’s (NASDAQ:AMZN) Amazon Instant Video services. But fleshing out YouTube’s premium content offers would put the service in more direct competition with other video streaming services like Netflix (NASDAQ:NFLX), Hulu and Amazon Instant Video than it has been historically.

Since its founding in 2005, YouTube has developed more of a brand akin to popular social networks like Facebook (NASDAQ:FB) or Twitter rather than premium content providers or cable services, given its reliance on amateur user-generated content. Countless brands now hawk their wares on YouTube through their "official channels." But could charging viewers directly to consume new video content risk changing the same brand that has made YouTube such an iconic web property in just eight years?

Premium channels will no doubt be a small portion of YouTube’s overall content, at least to begin with. And integration with other Google services like Google Payment could easily facilitate e-commerce on the platform. There are many potential benefits to imagine here -- downloadable content for offline viewing, tailored or customizable user profiles, and, of course, the content itself. But with Twitter’s recent introduction of its video-sharing service Vine, YouTube could be ceding ground in the battle for short-form, user-generated video content to another social media service.  

“We have long maintained that different content requires different types of payment models,” a YouTube spokesperson told GigaOM. “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.” 

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