YouTube to Introduce Paid Subscriptions

YouTube reportedly will launch paid subscriptions for individual channels, perhaps as early as the second quarter of 2013, according to Advertising Age.  It appears that the first paid channels will cost somewhere between $1 and $5 a month, and likely will be created by programmers already producing original content successfully for YouTube.

YouTube is treating paid subscriptions as an experiment. much like video rentals when it began in 2010. The initial group of channels will be small, likely about 25 at the outset. The revenue split from subscriptions is expected to be similar to the 45-55 split that is common for ads on YouTube. Partners will also have the option to include ads in their pay channels, but its unclear what form those will take.

Machinima, Maker Studios and Fullscreen are likely among the programmers YouTube has asked to submit ideas for paid channels. 

YouTube would initially launch around 25 paid channels. 

In the past, observers have argued that YouTube could represent the "cable TV  of the future." That might be stretching matters, at least for the moment. But if YouTube's new test proves successful, many smaller and niche programmers could find such YouTube distribution appealing.

With constantly climbing programming costs, distributors will be under pressure to pare back offerings to create lower-cost tiers of service. Those tiers will not include many niche or specialized channels. 

That inability to obtain significant carriage on video subscription networks will force budding networks to look elsewhere for audiences, and YouTube might then prove appealing. 

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