YouTube could launch subscription-based channels as early as this week, according to The Financial Times. The subscription model will give Google’s video sharing site a new revenue stream and support premium video content production.
The subscription-based channels, first reported on back in January, will compete with other online premium subscription services like Netflix, Amazon and Hulu. The Financial Times reports YouTube will unveil as many as 50 subscription-based channels with subscription fees as low as $1.99 a month.
YouTube, which surpassed one billion unique monthly users in March, is looking beyond its user-generated foundation and focusing on partnering with providers of high production-value content — all to better attract advertisers willing to pay for TV-like quality. In addition to new content, broadcasters and studios could use YouTube subscription channels to generate revenue for past shows and films.
A YouTube spokesperson would not provide specifics, but told FT that the company is “looking into creating a subscription platform that could bring even more great content to YouTube for our users to enjoy and provide our creators with another vehicle to generate revenue from their content, beyond the rental and ad-supported models we offer.”
YouTube launched ad-supported original content channels in 2011 and expanded that effort internationally last fall. After originally investing $100 million into 100 channels, it trimmed that number to focus only on those that proved to be profitable. YouTube claims the top 25 channels average more than a million views a week.
While still dwarfed by traditional TV, online video views have been growing. In March, over 182 million Americans watched 39.3 online videos, according to comScore. Google sites, driven by YouTube, dominate the market, serving nearly one-third of online videos in the U.S. Online video ad views hit an all-time high of 13.2 billion in March, growing 12% from the previous month. Google sites also lead in online video ad delivery.
As online and cross-device video streaming becomes increasingly popular with consumers, online companies beyond the subscription services are looking to grab both viewers and advertising dollars from traditional TV. Yahoo recently unveiled its exclusive deal to stream Saturday Night Live’s archives online, and AOL announced it is launching 15 new star-studded shows as well as an initiative to help media buyers compare digital video to TV and buy online video ad inventory at scale.