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YouTube could introduce paid subscriptions this spring

Caitlin Dewey
Washington Post

YouTube could roll out a paid subscription model for some content providers as early as next quarter, according to company sources quoted by AdAge and the Wall Street Journal.

The move will bolster YouTube’s attempts to lure viewers (and advertisers) from TV to computer screens. YouTube has never been secretive about that goal: At last year’s Consumer Electronics Show, YouTube Vice President Robert Kyncl predicted that 75 percent of all channels would start online within the next 10 years.

According to AdAge and the Journal, subscription models will start small and could take several forms. YouTube has apparently invited a group of roughly 25 channel producers to apply for the experiment, including media companies the site works with already, such as Machinima, Maker Studios and Fullscreen.

“We have long maintained that different content requires different types of payment models,” a YouTube spokesman told theWall Street Journal. “There are a lot of our content creators that think they would benefit from subscriptions, so we’re looking at that.”

Subscriptions won’t be the only payment model, though. Channel producers could also theoretically charge for early access to content, live event streams and one-off videos, something YouTube already supports.

Subscriptions will run between $1 and $5 a month; pay-per-view videos currently start at $1.99. Producers will split revenues with YouTube, probably along the 45/55 lines the platform uses for ads.

While this move represents a new (and potentially important) revenue stream for YouTube, it isn’t much of a surprise. YouTube has experimented with different payment models since at least 2009, when it allowed producers to charge a download fee, usually $1. In 2010, the site introducedmovie rentals in the U.S., a program similar to Amazon’s Instant Video. Most rentals run between $1.99 and $14.99.

The site hopes such efforts will prove enticing to content producers, like cable networks, who have been skeptical of YouTube’s ad-only revenue model. Better content producers means bigger payouts for the site: Celebrity YouTubers have luredbig-name advertisers like Toyota, Chevy and Lancome, not to mention millions of viewers, to the site.

Google’s chief business officer, Nikesh Arora, said during a recent earnings call that YouTube has become one of the biggest forces behind parent-company Google’s growth. Viewers watched an average of 4 billion hours of video a month in 2012, and YouTube earned $8 million in advertising revenue from the Gangnam Style video alone.




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