Tuesday, May 14, 2013

YouTube Now Offering Subscription Channels

Ah, Google.  In perhaps what is another moonshot, Google has taken what I believe to be, the first steps on the path to challenge cable companies and the channels packages we're all forced into buying even though nobody watches G4 now that it's all grown up.  This move has two key implications: (1) challenging cable companies to provide channel-by-channel subscriptions, and (2) YouTube video producers increasing the quality of their content, but moving that content to the paid channels listings and attempting to get their viewers to follow.

On May 9th, YouTube announced a pilot program for paid subscription channels.  Excerpted from their announcement:
Starting today, we’re launching a pilot program for a small group of partners that will offer paid channels on YouTube with subscription fees starting at $0.99 per month. Every channel has a 14-day free trial, and many offer discounted yearly rates. For example, Sesame Street will be offering full episodes on their paid channel when it launches. And UFC fans can see classic fights, like a full version of their first event from UFC’s new channel. You might run into more of these channels across YouTube, or look here for a list of pilot channels. Once you subscribe from a computer, you’ll be able to watch paid channels on your computer, phone, tablet and TV, and soon you’ll be able to subscribe to them from more devices.
Interestingly, none of the paid channels include YouTube sensations like Annoying Orange and the like, although by now they may have enough of an established revenue stream through alternate means that YouTube's one dollar a month wasn't enough to draw them in.  But think about that for a second.  One dollar a month.  Using an example like Annoying Orange that catches upwards of 150,000 views per episode, posting just one video a month would earn $150,000 minus taxes and fees, right?  $150,000 in one month?  Sure, I'll take that.

Suffice to say that for $1, there will be people that try the channel and don't like it, but to keep people's interest the content will have to be great.  Which is good, because this model will force all potential YouTube producers to step it up a notch if they want to earn revenue amounts past the total that ads can provide.  That begs the question, will we begin to see channels that used to be free start switching over to the $1 a month?  I doubt it.  I think as with Netflix trying to spin the DVDs off as a separate service, the established customer base will be resistant to change.

I think the best way existing channels can take advantage of the new distribution method is to create a separate YouTube channel, and start pointing the freeloaders (me included) over to the paid version.  Expect the call to action at the end of YouTube videos to start including the saying, "check out my/our other channel," which when clicked will bring you to the paid channel line up.

This improved content reinforces the You in YouTube because it's content created for and demanded by us.  Although there are numerous high quality shows on television like my current fav Hannibal, we're forced to pay for that channel along with however many others we don't watch.  

Speaking of not watching, a current trend for cancelled shows and those on the verge of cancellation to seek alternate networks for distribution, such as Arrested Development.  I foresee production companies watching this effort by YouTube closely to see if they can farm their "less successful" (by Nielson ratings anyway) shows for profit through that medium.  But don't get me started on why Nielson ratings are dead.

Here's to YouTube's efforts and hoping they're successful!  I can't wait to stop subscribing to Lifetime for Women...