Will people pay to watch YouTube videos?
Google's ubiquitous video service is reportedly going to start charging for some content
The internet is getting less free. That's not a political statement about state censorship or China's Great Firewall or the increasing surveillance of web browsing worldwide. It's just a studied observation: Newspapers are erecting paywalls, the Senate just voted to all but kill tax-free internet purchases, and people are abandoning music piracy for online stores like iTunes or subscription/ad-supported services like Spotify.
Now Google — perhaps the last bastion of good free stuff on the web — is reportedly going to add subscriptions to its ubiquitous video site YouTube. We're not talking about "the cats on skateboards," says Sabri Ben-Achour at Marketplace, "but high quality produced content," at as little as $1.99 a month per channel.
Several dozen channels will launch the service, with "paid channels for children's programming, entertainment, music, and many other topic areas," says Brian Stelter at The New York Times. "If the subscription option catches on, it could herald a huge change for the online video industry," ushering in paid content at YouTube's competitors and further challenging the cable industry, Stelter says. "For now, though, it is just a test, intended in part to mollify some of the most popular contributors to the sprawling website," including major media companies:
By enabling the subscription option, YouTube is giving them another way to profit from their work — if their fans are willing to pay to watch, that is.... As YouTube users read about the plan on Monday, many objected to paying for something they treat as free and ubiquitous as air and water. [New York Times]
Google is going out of its way to emphasize the experimental nature of the subscription model, says Christian Blauvelt at Hollywood. But this sure looks like YouTube's "Rubicon moment: The point of no return." Once the paywall is up, Blauvelt says, "it's hard to imagine YouTube going back. And ad-free paid content makes sense for children's programming, and companies that own the rights to old TV shows. "The real test for YouTube celebrities will be to see if users are willing not only to give them their time, but their money as well," he notes:
It's not surprising that YouTube wants to make inroads into the paid content market. Netflix has 30 million subscribers for its streaming video service, and even second-tier rival Hulu Plus has 4 million. But on YouTube it could get confusing... and expensive. Since YouTube will be allowing individual channels to charge subscriptions, it's possible users could subscribe to multiple channels at once. Even if each channel is as low as $1.99 a month, add up a bunch of them and you've got a monthly fee larger than what Hulu Plus or Netflix are charging. [Hollywood.com]
Regardless, this move is a no-brainer, says Cynthia Boris at Marketing Pilgrim. "Every content producer on the web is looking into paid subscriptions — but YouTube is one of the few with enough clout to make it work." In fact, along with old TV shows and YouTube-exclusive content, the site "could carve out a niche as the streaming site for instructional content": YouTube is a wealth of how-to videos on everything from how to use video-editing software to how to beat a level on Angry Birds. And YouTube stars? Let's not forget about them:
Suppose iJustine posted only one free video a month and you had to subscribe to see the rest? Would Gen Cers plop down $1.99 for access? I think so. It would be a tough sell at the start, but once people got used to the idea, they'd click and pay — as long as YouTube made it easy. Let me pay with my Paypal and I won't think twice about clicking the buy button. [Marketing Pilgrim]
The real question with this experiment, says Billy Buntin at PolicyMic, is: "Can YouTube get people to pay for better content?" The real lesson from Netflix and Hulu is that original content is king, and YouTube's "subscription decision has the big upside of potentially improving the scale, budgets, and quality of YouTube videos produced, with not much downside beyond the sparse grumblings of some users," Buntin says. The real rock stars of YouTube are the essentially independent filmmakers who make great films on a shoestring budget. "I'd happily pony up a dollar each month to directly support and encourage more content from people like them," he adds.
As anybody in the newspaper or magazine business, or the music or software industry, will tell you, it's hard getting people to start paying for something they've grown used to getting at no cost. All types of media are still experimenting with what works and what just loses viewers. YouTube, with its huge international reach, can learn a lot from its paywall predecessors — and the media world will be eagerly watching Google's success or failure.