Google's YouTube to allow user subscriptions

Will people pay for something that they previously received for free?

By Jonathan Berr May 6, 2013 4:22PM
Image: Couple with laptop (© Corbis)When Google (GOOG) acquired YouTube for $1.65 billion in 2006, investors wondered how the search engine giant planned to make money from the video sharing site. Now, seven years later, the company has a solution: monthly subscriptions.

According to The New York Times, Google is expected to announce a plan to let some video makers charge a monthly subscription. The system would work like the paywall at many magazines and newspapers, including The Times. It isn't clear how someone could qualify for the program, although YouTube probably has set the bar high. Most videos will remain free for viewers.

The channels will be divided into subject areas, such as children's programming and entertainment, but wouldn't have pre-scheduled programs such as cable and broadcast television networks. Some channels will cost as little as $1.99 per month. These changes have been rumored in the media for months and aren't a shock.

YouTube had little choice but to figure a way for its video content providers to make some money since rivals such as Amazon.com (AMZN), Hulu and Netflix (NFLX) have been ratcheting up their spending on original video content. As The Times notes, YouTube stars have been  "frustrated by what they see as relatively low amounts of revenue coming from the ads that YouTube attaches to their videos." As I found out in 2010, YouTube isn't shy about making a buck. A video my wife shot of my son dancing to "Eye of the Tiger" that we posted on the site wound up embedded with an ad urging viewers to buy the "Rocky III" theme song.

To attract potential subscribers, YouTube will have to convince people that it has more than cute kitten videos and that its content is worth the cost. That isn't going to be an easy task.

--Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter @jdberr.

 

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7Comments
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Will people pay for something that they previously received for free?

No, but people are stupid enough to spend $150/month for a useless cell phone plan, so I quess anything is possible.

May 6, 2013 6:07PM
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I would never pay to watch Youtube videos ever! Don't they make money off the ads??

May 6, 2013 9:06PM
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youtube pays a dollar or three per a 1000 hits  as far as i know. Most of the popular youtube channels rake in 6 figures easily since they have like a million subs .  Google makes money from ads already, so charging superscription fee will greatly reduce the number viewers. the whole reason youtube became popular was because it was a free platform for both the content providers and the viewers alike.  Changing that concept will reduce it to nothing more than another  online cable provider and I doubt many people will be willing to pay for it, and certainly not me
May 6, 2013 6:48PM
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I disagree with a paywall but I do think that letting people pay to have no ads is a good idea. 
May 6, 2013 7:57PM
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Not paying a dime - ever. I do look and listen to ads on very popular channels that I like because I figure it helps the guys making the video for us to enjoy. I kicked cable to the curb and will do likewise with any other thing that ends up costing too much. Will pay a very very very very small fee for no ads at all. Otherwise - youtube should know that some of us watch some of the ads and will support the advertisers just because youtube is free.
May 6, 2013 10:47PM
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the younger generations think that there is a price on everything...just a way of life..

yes they will probably pay without getting anything or anymore for the money..

they accept that to easily and will for generations to come..

they never had to struggle for the most part.

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