YouTube reportedly planning pay subscription option

Credit: Philip Montgomery for YouTube

This week, YouTube is expected to announce a plan that will allow some video makers to begin implementing a subscription fee, which will charge a monthly rate for access to content.

The proposed plan is unlikely to affect the majority of YouTube videos, which would remain free to all. However, the subscription plan will allow companies partnered with YouTube to explore the option as a second potential revenue stream, similar to the flexible pay walls currently in use by some newspapers and magazines.

Subscription channels will run the gamut from children’s programming to music and entertainment, among countless other areas of interest, at a cost of as little as $1.99 a month. These won’t be channels in the traditional television sense, so much as it will be a Netflix/Hulu-style library of videos on demand.

More on this story via The New York Times:

YouTube’s plan to add a subscription option has been an open secret in the online video industry for more than a year. The plan has gained momentum as Netflix, Hulu and Amazon have drawn in subscribers for their video offerings. Netflix has nearly 30 million streaming subscribers in the United States; Hulu’s paid service, Hulu Plus, has about four million. Amazon has not said how many people pay for Amazon Prime, which includes its video service, but the number is known to be in the millions.

YouTube’s strategy is different; in effect it is empowering partners to be their own Netflixes and Hulus, albeit not at the same scale. It looks more like the à la carte model of a newsstand than the bundled channel model of cable television.

If the subscription option catches on, it could herald a huge change for online video, which has subsisted almost entirely on advertising revenue. Executives at YouTube, though, have sought to downplay the initial importance of the paid subscriptions; some have described the plan as a test, intended in part to mollify some of the most popular contributors to the Web site.

Many homegrown YouTube start-ups have been publicly vocal about their frustration with what they see as YouTube's minimal revenue coming from the ads that the site attaches to their videos. This subscription option is intended to give users another way to get paid, provided their subscribers are willing to pay. It's unknown just how YouTube intends to split the revenue with its partners that try the subscription model, however the company reportedly pitched two options to partners: one version with ads and one without. The ad-free option held greater appeal to programmers of children’s channels, in addition to those interested in making their videos available overseas. Though the plan has opponents internally, the move is expected to serve as a means of expanding YouTube's reach, and increasing its profitability across markets -- both for its partners, and for the parent company itself.

What do you think? Would you pay for certain YouTube content if it were as low as $1.99 per month? What kind of content would you be willing to pay for, if any at all? Sound off in the comments!