YouTube is set to, according to reports, launch a new paid subscription model designed to bring more original content to the video platform than is currently available.
YouTube has traditionally been a free platform where users can upload and view video content that ranges from music videos and blogs to commercials and product demos. Now though, the free availability of some content is set to change according to a report from The Financial Times.
This report and other sources say that a subscription model has been in development for the past few months. While there aren't specific details, it is said this model could apply to 50 or more channels, with subscription rates starting at US$ 1.99 a month.
YouTube, which recently launched a new format with One Channel, has yet to officially confirm or announce this new service, The Financial Times quoted company representatives saying that they were looking into a subscription platform that could add to the kind of content YouTube users upload, such as television shows and films that could generate better revenue that the platform's current rental and ad-supported models.
A Marketing Tool
Most marketers still mostly rely on more traditional forms, like television, when deciding where to spend their video advertising budget. While there are more digital video advertisements being released, the Financial Times said this isn't being utilized as much it should be. In 2013, digital video advertising is expected to move from a US$ 2.93 billion industry to US$ 4.14 billion, but will still only have 2.4 percent of the advertising budget.
For marketers this new service can help improve these numbers by showing them how viable video advertising can be. With this new platform YouTube adds to how company's gather revenue by giving them a way to separate free and exclusive content. If promoted properly, users can expand their fan base by launching targeted advertising campaigns to attract more subscribers, which also improves the ROI.
Charging subscription fees will allow the online video provider to add a second revenue stream and help finance a broader content offer,” said Georg Szalai of The Hollywood Reporter.
Also, this will add to parent company Google's ever-expanding online empire if users decide that YouTube can be a good television and film platform.
YouTube subscriptions would put Google on a collision course with video-on-demand services like Netflix, allowing channel owners to finance the creation of new content but also bring in revenue from older shows and films,” said Matt Brian of The Verge.