How will YouTube’s new pay-to-watch channels impact the online content market?

By Chris Lee

The Google-owned video site YouTube has announced a trial scheme to provide paid-for channels starting from £0.64 ($0.99) per month. An initial 53-channel offering, including Sesame Street, UFC and National Geographic Kids, among others, is set to go live offering free 14-day trials and other incentives.

It its blog, YouTube said: “Today, there are more than one 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.”

After subscribing, users will be able to watch paid channels on their computer, phone, tablet and TV, and soon with more devices to come.

YouTube under pressure

The world’s most popular online video channels added in its blog that the launch of paid-for services were to enable content creators to earn revenue for their creativity, but one leading industry expert believes the move is a strategic response to growing competition.

Stuart Fuller, director of commercial operations and communications at online brand protection specialist NetNames, told NMK that YouTube has been spurred to trial paid-for services for a number of reasons.

“The growing popularity of on-demand video channels such as those offered by Netflix, Hulu and LoveFilm has led to many users abandoning YouTube in favour of more streamlined and up-to-date services which offer a better range of films, TV series and one-off shows,” Fuller believes. “Google will have watched through clasped hands as LoveFilm and Amazon teamed up last month to start releasing pilot episodes of new programs, featuring the likes of John Goodman and other Hollywood celebrities.”

Fuller argues that Google will intend to better control content that is uploaded on to YouTube through such paid models, and hence avoiding painful and costly task of taking down pirated content online.

“Consumers will need to start getting used to this type of online models, as big ‘social’ brands and platforms cannot simply make money from selling advertising alone. Subscription models are only set to become more and more common in future,” he told NMK.

Meanwhile, YouTube promise that this move “is just the beginning”, adding: “We’ll be rolling paid channels out more broadly in the coming weeks as a self-service feature for qualifying partners. And as new channels appear, we’ll be making sure you can discover them, just as we’ve been helping you find and subscribe to all the channels you love across YouTube. Just as the partner program empowered creators to take their channels to the next level, we look forward to seeing how this great community of creators moves ahead with a new way to reach the fan communities that made their channels a hit.”

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