February 02, 2013, 7:27 AM — YouTube could be preparing to get into the subscription video business this spring, if one report proves accurate.
According to AdAge's unnamed sources, YouTube wants to offer paid channels at a cost of $1 to $5 per month. There would be about 25 channels at first, possibly launching as early as the second quarter of this year with an announcement in late April.
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But don't think of YouTube subscriptions as another Netflix or Hulu Plus. Instead of stacking its channels with well-known TV shows and movies, YouTube reportedly wants to create premium versions of existing YouTube channels, such as those offered by Machinima and Maker Studios, who create their content exclusively for the Internet.
YouTube could also try to attract small cable networks that haven't gained much traction through traditional pay TV services. (As AdAge points out, YouTube CEO Salar Kamangar alluded to that possibilitya year ago.)
It sounds like the premium channels, if they are actually coming, would be an extension of YouTube's original content initiative, an effort compete with broadcast TV by funding entirely new Web-based shows. Google spent over $150 million on the first wave of content in 2011, and last year said it would spend another $200 million to keep the project going.
It sounds good in theory--YouTube sees itself as creating next-generation successors to MTV, CNN and other traditional channels--but as I noted when the first batch of channels launched, the execution could be better. It's still too hard to find longform content, with most videos clocking in under 15 minutes, and it takes a lot of work to separate the wheat from the chaff. YouTube may very well have funded some great television, but it not very easy to find it all.
If YouTube expects people to pay for content, it'll have to improve the browsing and viewing experience, so there's less confusion and hunting around for quality video. Once money's involved, users will need to know exactly what they're getting ahead of time, and why it's worth paying for when YouTube already has so much free content available.
My guess is that the launch will be somewhat subdued, and mainly pitched to people who already tune into Machinima or other channels on a regular basis. That may not be enough to spark a TV revolution, but it's something YouTube doesn't even allow for today, and seems like the logical next step as YouTube tries to move beyond its reputation for cat videos.