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YouTube Selling Subscriptions

15 May, 2013 By: Doug McPherson

SAN MATEO, Calif. – YouTube launched a pilot program last week for “a small group of partners” that will offer paid channels on YouTube with subscription fees starting at 99 cents per month.

After users subscribe from a computer, they’ll be able to watch paid channels on their computer, phone, tablet and TV – and soon they’ll be able to subscribe to them from more devices.

Every channel has a 14-day free trial, and many offer discounted yearly rates. One example: Sesame Street will be offering full episodes on its paid channel when it launches. And UFC fans can see classic fights, like a full version of their first event, from UFC’s new channel.

YouTube wrote on its site last week: “This is just the beginning. We’ll be rolling paid channels out more broadly in the coming weeks as a self-service feature for qualifying partners. Just as the partner program empowered creators to take their channels to the next level, we look forward to seeing how this great community of creators moves ahead with a new way to reach the fan communities that made their channels a hit.”

Analysts have been forecasting the subscription service for months. Earlier this year, Advertising Age reported that the Google-owned site was exploring a way to let some of its content partners sell subscriptions through the site.

And a few days ago Sanford Bernstein analyst Carlos Kirjner wrote that the odds were “extremely high” that YouTube will be a large, profitable media business along the lines of CBS or Viacom within years.

“It is becoming an attractive and important medium for brand advertisers, and we think it will increasingly compete for the incremental video-delivered brand advertising dollars,” Kirjner wrote in a weekly note to investors, adding that YouTube could exceed $15 billion in annual sales “in the next several years.”

Google’s video sites drew an estimated 153.9 million unique viewers in March, according to comScore. Among YouTube’s partner channels, which are seen as the most likely candidates for offering paid subscription services, Vevo reached about 50.7 million unique viewers during the month. Fullscreen followed with 40.1 million; Maker Studios had about 33 million; and Warner Music 32.5 million.

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