Google Subscriptions for You Tube
YouTube is taking a logical next step to build its revenue base by distributing more professional programming to its huge audience. It isn’t clear how successful this type of original content will be with viewers, but thanks to YouTube, Netflix, Hulu, Amazon, etc. it seems evident that video programming will continue to fragment in the near and intermediate-term (particularly as wired and wireless higher speed broadband access continues to improve). This type of development makes “cord cutting” a more viable option — particularly for younger demographics — although access to live sports programming remains the biggest impediment to viewers completely forgoing more traditional cable or satellite service.
Google is on the verge of unveiling an à la carte subscription service for some of YouTube’s specialist video channels, to finance a broader range of content and add a second revenue stream to the digital video market leader. The move, which has been in the works for months, could be announced as early as this week. It will apply to as many as 50 YouTube channels, people familiar with the plan say. Viewers will be able to subscribe to each channel for as little as $1.99 a month.
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Cable and satellite channels, which traditionally rely on a dual revenue stream model, are eyeing YouTube’s subscription service to generate revenue from older shows and new programming, according to another person familiar with the project. YouTube has moved away from its early days as a destination for user-generated content to professionally produced video that would not look out of place on television. In the past 18 months it has spent more than $200m on advances to dozens of start-up channels…
Time Warner, The Chernin Group, Bertelsmann, Discovery Communications and Comcast have all invested in companies that create or aggregate YouTube content. Traditional media companies are also eyeing audiences flocking to individual YouTube channels: DreamWorks Animation, the company behind the Shrek movies, this week acquired Awesomeness TV, a “teen-focused” YouTube network in a deal that could be worth $117m if earnings targets are met.