The overwhelming majority of videos on YouTube, a unit of Google, will remain free to all, but the plan will let the company’s partners try out a second source of revenue, analogous to the flexible pay walls that some newspapers and magazines have adopted.
There will be subscription channels for children’s programming, entertainment, music and many other topic areas, according to the people with knowledge of the plan, who spoke on condition of anonymity because they had been asked by YouTube not to comment publicly yet. Some channels will cost as little as $1.99 a month.
These won’t be channels in the television sense of the term; rather, they will consist of libraries of videos on demand, much like the thousands of free channels already on YouTube. Some of the video makers who have worked with YouTube on the subscription option want to convert existing fans to paying customers; others hope to distinguish themselves by selling archives of old TV episodes.
Some of the partners planned to start promoting their channels on Thursday, though the announcements could come sooner, in light of recent press coverage. The Financial Times reported on Sunday that the announcements were expected as early as this week.
A YouTube spokesman declined to comment on the specifics of the subscription plan. In a statement the company said, “We have nothing to announce at this time, but we’re looking into creating a subscription platform that could bring even more great content to YouTube for our users to enjoy and provide our partners with another vehicle to generate revenue from their content, beyond the rental and ad-supported models we offer.”
YouTube’s plan to add a subscription option has been an open secret in the online video industry for more than a year. The plan has gained momentum as Netflix, Hulu and Amazon have drawn in subscribers for their video offerings. Netflix has nearly 30 million streaming subscribers in the United States; Hulu’s paid service, Hulu Plus, has about four million. Amazon has not said how many people pay for Amazon Prime, which includes its video service, but the number is known to be in the millions.
YouTube’s strategy is different; in effect it is empowering partners to be their own Netflixes and Hulus, albeit not at the same scale. It looks more like the à la carte model of a newsstand than the bundled channel model of cable television.
If the subscription option catches on, it could herald a huge change for online video, which has subsisted almost entirely on advertising revenue. Executives at YouTube, though, have sought to downplay the initial importance of the paid subscriptions; some have described the plan as a test, intended in part to mollify some of the most popular contributors to the Web site.
Indeed, some homegrown YouTube stars and start-ups have been frustrated by what they see as relatively low amounts of revenue coming from the ads that YouTube attaches to their videos. By enabling the subscription option, YouTube is giving them another way to get paid — if people are willing to pay, that is.
It is unknown how YouTube will split the revenue with the partners that try subscriptions. A number of YouTube’s most popular video makers have passed on the subscription trial, preferring to watch and learn from others.
The company pitched two options to partners: one version with ads and one version without. The ad-free option was appealing to programmers of children’s channels, according to some people briefed on the plan. Another appealing aspect: some of the subscription channels will be available internationally, allowing for a vast potential audience overseas.
Article source: http://www.nytimes.com/2013/05/07/business/media/youtube-said-to-be-planning-a-subscription-option.html?partner=rss&emc=rss