Google Inc.’s video YouTube is considering launching a subscription video service in the face of increased competition for original content from VoD services including Hulu and Vimeo. Its important for the company to evolve to survive in the market. Recently the company launched YouTube Music Key which is a $7.99 per month subscription service that offers ad-free access to selected music videos as well as streaming from Google Play Music. The rumor suggest that YouTube’s new subscription video service might put some of its best content behind a paywall.
The rumor stems from a comment left on a Variety report which claims that YouTube is “exploring the prospect of launching its own subscription VOD service,” that offers unlimited, ad-free access to music videos and full access to Google’s Spotify Inc. The unnamed source claims to be an executive at a company that works with YouTube to produce videos.
Putting aside the car crash, cat and all other types of compilation and cute home videos that will continue to be uploaded to YouTube, the video market has matured in 2015 where the big money, eyeballs comes from marquee content. YouTube itself has been investing in its bigger original content creators, but upstarts such as Hulu and Vimeo, who are primarily looking at quality content over than quantity of content have the money, and desire to poach YouTube stars with better terms. With a paid service YouTube will be able to offer those creators more money and thus ensure that is biggest stars don’t jump ship.
Comparing YouTube to Hulu is nearly an apples and oranges comparisons; sure Hulu is getting into more original content, including poaching YouTube stars, but Hulu offers an additional value proposition via way of its content from major television networks.
Well yes. YouTube stars are reported to make million from advertising, but video advertising is suffering the same pressure the broader advertising market are: still plenty of money around, but ever declining returns for the content provider due to an ever-increasing glut in available inventory.
Details about pricing or launch have not been revealed. YouTube has neither confirmed nor denied that it is working on putting more content behind a paywall. Time will tell what Google intends to do, but in this market there’s a very good chance they’ll launch something sooner rather than later.