Is YouTube Preparing To Take Over TV?

Michael Harper for redOrbit.com – Your Universe Online

At the core of all the talk about an Apple-branded television or an Intel-branded set top box is one persistent complaint: Consumers are tired of the package model sold by cable companies. Most people feel that it simply makes more sense to pay for only the channels that they want to watch, yet it makes more fiscal sense for the carriers to offer content in tiered groups as they currently do.

This frustration – among others – has driven many consumers to ‘cut the cord,’ as it were, and look for other ways to watch the content they want. According to a pair of reports that appeared yesterday evening, YouTube may be ready to entertain these cord cutters by introducing paid subscriptions for individual channels. According to Ad Age and the Wall Street Journal, these paid channels are meant to shift the amount of advertisers, viewers and, ultimately, money from traditional TV sources over to YouTube.

Ad Age’s sources claim that YouTube has already been reaching out to content providers, asking them to submit applications and create channels worthy of a paid subscription. Channels are said to run anywhere from $1 to $5 a month and could be ready for launch as early as this spring. Some suspect that YouTube may even choose to announce this new platform in April at the Digital Content NewFronts conference in New York City.

In addition to operating like a common television channel, these paid subscription channels may even be able to offer up content libraries containing a host of material as well as stream-live events. According to the WSJ’s sources, “YouTube also hopes that owners of struggling cable-TV channels might opt to move their content to YouTube.” Though it’s not yet clear which channels will be the first to land a spot on YouTube’s new subscription service, both Ad Age and the WSJ believe those channels with high numbers of subscribers will be among the first to find success on this new platform.

Already a household name and major player in content delivery, YouTube could have a good shot at success with their new platform. However, the Wall Street Journal urges cautious optimism, mentioning that these sort of paid models for early access to content haven’t always been successful. As an example, the WSJ mentions Revison3, the Internet television station which hosts the Diggnation. This channel once allowed users to buy subscriptions for early access to their show but eventually abandoned the model when it began to focus on “selling advertising against the video content.”

YouTube mainstay free content will remain in place if the company decides to expand to a new platform, say the sources, and while the Google-owned company already offers video rentals, this new service could earn them even more revenue every month. In the beginning, YouTube is expected to host only 25 of these paid subscription channels. According to Ad Age, YouTube will split the revenue that they receive for these channels 45/55, a rate similar to the one shared by advertisers on the Internet platform. Sources say these paid subscription channel owners will also have the option to run additional advertising.

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