When Google bought YouTube for a billion and a half dollars back in 2006, some thought it was foolhardy. Surely the major content players would come crashing down on YouTube for copyright violations and how in the world are you going to monazite Keyboard Cat?
For the most part, Google has made nice with the major content players, regularly taking down videos that infringe on copyright. Plugging in the powerful Google advertising engine was the next logical step and has worked very well. In the six years since Google bought it, YouTube has only grown larger and more powerful. My daughter spends as much time or more watching YouTube as she does traditional TV and I think that’s pretty typical for the average teen these days.
Now Google is taking the next step and it’s a bold one. YouTube will start offering subscriptions for channels this spring. There will be a select few channels in the experiment and it is thought pricing will be anywhere between $1-$5/mo for a channel. Google has always been an advertising company so this is an interesting move but to the extent they get people used to paying a la carte for video, it could explode the current television business model. Today, customers have to pay for a package of TV channels for a set price wether they want those channels or not. Similarly, cable operators are often forced to license channels in a package as well. Both cable operators and end customers have become frustrated with this model and would rather pay for channels a la carte or at least be able to choose which channels make up their package. YouTube is clearly the most powerful video platform on the web and if anyone can challenge the current business model it’s them. Of course there is no guarantee paid subscription channels will even work on YouTube where people are used to getting their content for free.