Media Planning & Buying

Report: YouTube to Introduce Paid Subscriptions

January 30, 2013

YouTube, the most popular video-sharing destination on the web, rose to prominence thanks to its vast library of free video content. According to Ad Age, the platform is planning to shake things up this spring by introducing paid subscriptions for some of its channels.

For marketers this comes as no surprise, as YouTube has been very public in its focus on original programming since it announced a lineup of more than 100 new channels across 19 verticals in October 2011. Beyond that, competitors Hulu and Netflix are already charging viewers for content (Netflix is 100 percent subscription-based, while Hulu charges for its premium Hulu Plus product).

The creation of premium and original online content – the $100 million-backed programming venture from last fall – and the introduction of a subscription move YouTube further down the path of maturation in the video space, away from its UGC roots.

YouTube’s move to a partially-paid model represents yet another indicator of a broader trend first introduced at last year’s Digital Content New Fronts, which is the proliferation of native digital content used to attract large brand marketers.

Through the introduction of paid subscriptions, video platforms can create a more “valuable” audience of paying subscribers to which ads can be targeted and served. Armed with subscription data (demographic, geographic, etc.), advertisers can serve more relevant ads — and perhaps even track users across multiple devices.

Moreover, advertisers can reach audiences through more creative marketing that doesn’t solely rely on ad buys. This might mean seeking ways to integrate within existing content, or creating branded content of their own that is quality enough to elicit paid subscriptions.

As original digital content continues to mature, the lines between media continue to blur. After all, what is “TV” if you can watch your favorite shows from a device that isn’t a television? With greater investment and funding, content creators might gravitate toward digital’s flexibility and interactive nature – similar to the way creators have flocked to premium TV channels like HBO and Showtime for the past decade.

Sarah Hite, Group Media Director, and Jess Sanfilippo, Group Media Director at 360i, contributed to this report.