YouTube set to launch paid-for channels

Jan 30, 2013

Online video site plans to enter subscription market, competing with streaming giants Netflix

YOUTUBE is set to enter the burgeoning premium video market, putting the Google-owned site in direct competition with the world’s biggest streaming service Netflix.

The move to sell subscriptions to some channels heralds a new chapter for the online video site, breaking with its current advertising-dependent business model. As well as targeting Netflix, which boasts more than 30m subscribers, YouTube’s premium channels will take on other online video subscription services such as Hulu and Amazon.

According to the Financial Times, the site will charge viewers $1-$5 per month to view some channels and could launch the service as soon as March. YouTube, which is visited by 800m people globally every month, reportedly plans to treat the premium service as an experiment and has spoken to only a handful of video-makers about the project.

"There are a lot of our content creators that think they would benefit from subscriptions, so we’re looking at that," a Google spokesperson said. "We have long maintained that different content requires different types of payment models."

YouTube is expected to make $5bn this year, twice as much as in 2011, notes The Times. It has previously allowed media companies such as BBC Worldwide and Endemol to create dedicated channels on the site, splitting the advertising revenue with them. Regular uploaders can also make money through allowing the site to advertise their videos as part of a partner service. For premium channels YouTube plans to take around 45 per cent of the revenue and give the rest to those who provide content, according to the FT.

YouTube CEO Salar Kamangar hinted at the paid-for plans at last year's AllThingsD conference and said the site may even try to poach channels from cable TV in America, Zdnet reported. "If we have a subscription model, then absolutely, that's something that becomes possible," he said. 

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