YouTube launches pay-to-watch subscription channels

At this year’s Brandcast, whilst talking about the power of YouTube, Eric Schmidt of Google uttered the monumental words…


“the future is now”


With the news that YouTube is now allowing some creators to set subscription fees and accept advertisements at their discretion, we ask:

what is this future?


The Future is now


“The Future is now” Eric Schmidt

Subscription Channels

30 content creators, including The Jim Henson Co and Entertainment Studios (the largest independent producer and distributor of first-run syndicated television programming for broadcast television stations), have just been given the opportunity to offer subscription based channels on YouTube.


“This is a whole new form of content, content delivery and content consumption. It’s the medium of the future and the future has already arrived.” Jeffrey Katzenberg – Dreamworks CEO


What’s the benefit for the content creators?

Roger Corman, a recognised producer and director, has made of point of kepping his 400 strong film library off streaming sites like YouTube. Until now, that is. He see’s YouTube as the future. Viewers can now subscribe to his channel for $3.99 a month for a rotating selection of 30 movies and additional content.


“I believed for many years that the future of motion picture distribution, particularly for the independents, is on the Internet. I think the time is now.” Roger Corman


And who can blame his outlook? Especially when a clip from Corman’s 2010 movie “Sharkopus” went viral it got 11 million views! If you’re not familiar with Corman’s work, here’s a taster:

Should we pay?

Traditionally, a production company pitches an idea to a TV channel. If they like the idea, they’ll provide a budget and the programme gets made.

Whereas, the more successful channels on YouTube fund their projects through the money they make on advertising. By YouTube offering this service, creators are able to build a more structured model and create higher budget content. YouTube is not becoming a totally subscription channel – we still have a choice to whether we pay for premium content or watch the millions of free videos.


Watch as much Freeview as you like, or pay Sky or Virgin for premium content. This example draws parallels with YouTube’s vision”


On a personal note, we think YouTube’s plan is brilliant. It encourages creativity and the golden carrot for creators is their own subscription based channel with the revenue to boot.


Are advertisers favouring YouTube now?

Your average American will spend 15 minutes on YouTube a day opposed to 5 hours watching network TV, hence many advertisers are still favouring Network TV for their placements.


“I thought of YouTube like TV, but it isn’t. I was wrong. TV is one-way. YouTube talks back”. Robert Kyncl, YouTube’s global head of content.


At Brandcast, Schmidt used the term ‘Generation C’ to describe the connected youth (more 18-34 year-olds watch YouTube than any cable network), enforcing the idea that YouTube is more about connection than simply viewing. YouTube is not TV.


More advertisers are now getting to grips with this new medium of engagement and many are reaping huge rewards. The tide for advertising is turning and turning fast.


Google have just announced a partnership with the Association of National Advertisers’ Alliance for Family Entertainment to create more digital family content. DreamWorks Animation have also announced the purchase of the YouTube network ‘Awesomeness TV’ for $33million.

Screen Shot 2013-05-10 at 11.18.33


YouTube is a different medium. It can be compared to Network TV. It can be compared to video services such as Netflix. The reality is, it’s a whole new medium in itself.


So what will this subscription model bring us?


According to a recent survey by YouGov, 55% of people in Britain have connected their TV’s to the internet. Also, during the first quarter of 2013 the global tablet market saw an incredible growth of 142.4%.


By making high quality content available to us, it puts YouTube on a pedestal compared to traditional mediums (TV and On Demand Services). Get free content, get premium content, get paid for creating highly watchable content.

If you haven’t started watching YouTube on your TV, then it’s only a matter of time before you do.

“The Future is Now.”

We’re shortly going to be releasing more fun video productions on our YouTube channel, so keep an eye out.

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