Google and YouTube recently announced that they will be allowing some YouTube channels charge monthly subscriptions of $.99 and up, creating what they hope will be an alternative to cable TV, a video service willing to offer individual channels on the cheap instead of forcing people to buy bundles of channels, many of which they’ll never watch.
The subscription offerings now available from YouTube include Sesame Street, National Geographic Kids, Treehouse Direct, and Ultimate Fighting Championship. Nothing from Disney, Comcast/NBCUniversal, or any other major media company is available yet.
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For its part, Google says it’s mostly trying to give its channel partners a way to make money in a different way than simply advertising. From its blog post today:
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.
More paid channels will be announced in coming weeks. If YouTube can get a critical mass of hundreds or even thousands of paid channels–most of which will likely continue to run ads as well–it may well start to offer something resembling a more flexible version of today’s pay TV.
Just don’t expect a true alternative to cable or even Netflix NFLX +1.82% or Hulu alternative anytime soon. First Google has to prove subscriptions work for viewers, who have become accustomed to going to YouTube precisely to get free video. Then it will likely need to create its own bundles to attract broader audiences and at the same time amass audience segments advertisers will want to reach as well. Finally, it will have to persuade bigger media companies with more mainstream shows–the stuff that will really woo people away from the living-room screen–that they can run their shows on YouTube and make enough to offset whatever they’re cannibalizing from pay TV partners.
YouTube will not be a legitimate competitor to cable TV for some time, but this seems like the first step for it to become one. Once a major media player signs on with them, then we’ll be talking.