YouTube takes on Netflix with paid content

31/01/2013

YouTube is set to offer premium channels later this year, as Google looks to take on the likes on Hulu and Netflix in the paid video content sector, according to a news report.

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According to a report in Advertising Age, YouTube has asked several of its contributors to submit applications to create paid-for channels.

The first channels will be available to users by the spring for between $1 and $5 per month, the marketing magazine reports.

YouTube plans to keep around 45% of the subscription revenue themselves, with the rest going to the producers of the content, according to the report.

YouTube has been moving to add professional-grade videos to the vast archive of amateur videos that made the site popular.

The current crop of such channels is available to consumers for free and supported by advertising that appears alongside the videos.

YouTube is set to offer premium channels later this year, as Google looks to take on the likes on Hulu and Netflix in the paid video content sector, according to a news report.

A Google spokesman told the magazine: "We have long maintained that different content requires different types of payment models. The important thing is that, regardless of the model, our creators succeed on the platform. There are a lot of our content creators that think they would benefit from subscriptions, so we're looking at that."

Google began investing heavily in original video content in late 2011, providing funds to film makers in the form of an advance against future advertising revenues.

According to eMarketer, a research firm, advertising spending on digital video in the US grew by 47 per cent to $2.9bn (£1.84bn) last year but is dwarfed by the $65bn spent on television advertisements.

Television made up about 40 per cent of total media spending in the US in 2012, according to eMarketer, compared with less than 2 per cent from online video.

Read the Advertising Age report here

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