Rumor: YouTube to starts subscription fee for channels

A small group of YouTube channels, including Sesame Street will be able to charge a small subscription fee for programming.

UPDATE

TRUE

YouTube announced in a blog post that subscription fees will start at 99 cents

YouTube launched an a la carte subscription plan this week allowing channels to charge a monthly fee for content, according to reports by Inqusitr, USA Today and CNN.  

Subscription fees start at 99 cents per month and viewers can watch paid channels on phones, tablets, PCs and televisions. Viewers can also sign up for a 14-day trial to try out a channel for free before they buy a subscription.

YouTube released said in a blog post that a small group of partners, including Sesame Street and Ultimate Fighting Championship, will be offering episodes and programming to subscribers.

"Today, there are more than 1 million channels generating revenue on YouTube, and one of the most frequent requests we hear from these creators behind them is for more flexibility in monetizing and distributing content. We’ve been working on that and wanted to fill you in on what to expect," according to the blog post.

Previous story:

The possibility of YouTube charging for content has created buzz on the Financial Times, the Washington Post, the Daily Mail, Mashable, and the Daily Caller.

YouTube in the past year and half has spent more than $200 million on advances to dozens of start-up channels, the Financial Times reports.

"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," according to The New York Times

It added that these won’t be TV-like channels, but instead libraries of videos on demand. Some video makers "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 Times reports.

YouTube told The New York Times and the Washington Post in a prepared statement that it has nothing to announce yet, but it is “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.”

From free to not-so-free

In an age not long past, videos on YouTube started instantly with no commercials beforehand or ads that pop up on the bottom the screen. Today advertisements are an everyday part of the YouTube experience, and, as ABC News has reported, top videos can earn huge profits for both Google, which owns YouTube, and for the people who upload the videos. Taking the video-monetization scheme to the next level may very well include the launch of paid content an area YouTube can tap into with the help of online-only production companies like Maker Studios, Machinima and Fullscreen.

$1 to $5 per month

AdAge was the first to report that YouTube had "reached out" to content producers about launching paid content and that subscriptions to the channels would cost between $1 and $5 per month. UberGizmo most recently reported a leaked piece of YouTube HTML code, which includes the words "paid channel subscribe" in it. The idea of charging users for content isn't new for Google, as CEO Salar Kamangar has spoken before about poaching viewers of certain niche programs by offering the shows direct to fans at a lower cost than cable.

Is it 'premium' enough?

Paying for content on "premium" TV channels like HBO is often justified by subscribers because of the high-production value of shows like "Game of Thrones," "The Sopranos" and "The Wire." Watching some of said programs can often feel like watching a Hollywood film production and, thanks also to a lack of commercials, subscribers are often happy to part with a few dozen dollars every month. None of the YouTube-only production companies, however, produce programs at the level of HBO or Showtime and, as Mashable points out, only rarely appear to be as high quality as regular network television which is free. So in order for YouTube to charge for content it seems clear that it will need to step up its game in order to make shows that are worth paying for. Then again, if YouTube goes the route that its CEO has hinted at, paid content may be less about "premium" channels and more about unique and highly specialized content that appeals to a certain small audience.

Sally Deneen contributed to this report.

 

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