Report: YouTube Mulls Content Subscription Service

by , May 11, 2012, 7:59 AM
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In a bid to attract more content deals with big media companies, YouTube is considering implementing a paywall around certain content, The New York Post reported on Friday morning.

Citing insiders close to the discussions, the paper reported that this does not mean YouTube will begin charging for content that is already available for free, but might add premium offerings that are not already on the video-sharing site.

In adding a new subscription service, the idea is to entice owners of high-demand programming in categories such as live sports, music and entertainment to put their content on YouTube. Much of this content is owned by big media companies, which receive the bulk of their revenues from TV advertising and subscription TV carriage fees. Many of these companies have been unwilling to put their content on YouTube, because of its predominantly advertising-only business model.

As The Post report points out, the paywall idea is not necessarily a new one for the Google company. At an industry event in January, CEO Salar Kamangar mentioned that YouTube might implement a new subscription service: “We’re a media platform and we want to [have] a business model that media partners demand,” Kamangar said.

YouTube already sells movie rentals through its YouTube Movies channel. It also has one sports subscription venture: a partnership with WillowTV that gives customers access to cricket events around the world for $45.99 for the season. Parent Google also has a separate pay-as-you-go platform called Google Play that gives customers access to certain movies, music and books.

“We have long maintained that different content requires different types of payment models,” a YouTube spokesperson said. “The important thing is that regardless of the model, our creators succeed on the platform and viewers find more content to watch.” He added: “There are a lot of our content creators that believe they would benefit from subscriptions.”

YouTube has a global unique audience of 800 million users, who watch some three billion hours of content per month. Google does not disclose YouTube’s financial information, but analysts project its revenues at between $2 billion and $3 billion per year.

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