YouTube expects to test the pay-TV waters, experimenting with charging subscription fees for virtual channels of video provided by content creating partners.
YouTube currently gives content providers the opportunity to support their video with paid advertising. The option to charge subscription fees would be new, and it would the decision of content partners – such as BBC Worldwide, Endemol and FremantleMedia – to go that route, according to multiple reports of the remarks of a YouTube executive speaking at the Abu Dhabi Media Summit.
YouTube vice president Robert Kyncl, the company’s global head of content, was quoted saying that he expects most content partners are more likely to continue to support their video with advertising, but that some are likely to try to charge fees.
YouTube typically keeps all advertising revenue from its virtual channels until it recoups its original investment; once it gets back its investment, it subsequently shares revenue, with the split at or near 50/50.
Over the last year or so, more than 150 original channels have been established on YouTube. These include channels for ESPN, ABC News and Nike, as well as channels for Taylor Swift, President Barack Obama and presidential contender Mitt Romney.