YouTube plans to start selling subscriptions to some of its streaming video channels, putting it onto the same playing field with Hulu and Netflix. The company has invited a small number of content producers to submit proposals for channels that would charge $1-$5 per month, according to a Financial Times story. The paid channels would be launched as soon as Q2, the story said. YouTube, which has until now relied entirely on advertising, plans to take about 45% of subscription revenues for itself and give the rest to the channel producer.
“We have long maintained that different content requires different types of payment models,” said a YouTube spokesperson. “There are a lot of our content creators that think they would benefit from subscriptions, so we’re looking at that.”
Hulu, jointly owned by Disney, News Corp. and Comcast, has 3 million subscribers. Netflix has more than 30 million subscribers and will this week premiere its adaptation of the BBC series “House of Cards”.
In recent years, YouTube has spent over $110 million, forming content deals with a variety companies to create dedicated channels and split the ad revenues. These companies include All3Media, Endemol and BBC Worldwide. MondoMedia, a group that produces off-beat adult cartoons, was the most popular channel on YouTube last week with 6m views and has been seen 1.4 billion times since inception.
RBR-TVBR observation: It’s a bit like how cable television came to be in the 70s, without all of the infrastructure build-out. YouTube, Hulu, Netflix and others are the new round of MSOs and cable networks, all catering to the cord-cutters. All they need to really tip the scale is their own established set of “Mad Men,” “Hardcore Pawn,” “Breaking Bad” and other shows that really connect with viewers and they’ll be as important as AMC, A&E and TruTV. The icing on the cake is most TVs being produced now are internet-ready.