Google Inc.’s YouTube recently introduced a pilot program for paid channels on the site. With over four billion views per day, this program has potential to generate a lot of revenue for the company. Viewers will be charged a 99 cents or more subscription fee per for a few dozen popular channels. Each channel will allow two weeks of free viewing before any charges occur and offer incentives for those who sign up for an annual subscription.
According to YouTube, “this is just the beginning.” They will eventually broaden the scope and create more paid channels. There is little risk for YouTube, but there is a chance it could generate significant revenue from subscriptions.
YouTube’s paid subscriptions would level them up against other streaming services such as Amazon Instant Video, Hulu Plus and Netflix. However, the video quality is noticeably less than the previously mentioned competitors. This poses the question, will people pay for yet another service?
It will be interesting to see if these changes will affect how digital marketing agencies advertise on YouTube. Will these paid channels support advertising at all? If so, will advertisements be less effective because fewer people will see them on the channel?