According to Stetler's source, paid channels will crop up soon for "children’s programming, entertainment, music and many other topic areas." The implication from Stelter's article is that the channels (of which there will be "several dozen at the outset" -- will be from popular providers (i.e. companies with large libraries on the site).
The move comes as the online marketplace for video content is rapidly shifting.
Content owners have been selling their products as individual downloads through services like iTunes, Amazon, and WalMart for some time; direct-to-fan distribution is gaining popularity for specific films (as Alison Willmore's report from the San Francisco Film Society's Artist2Entrepreneur launch shows us).
In the streaming world, YouTube is, of course, the leader. YouTube has been an incredible library of ad-supported free-to-access films. The filmmaker-friendly Vimeo announced it would be allowing filmmakers that had Pro Accounts to sell access directly to their films at a very competitive revenue share (filmmakers keep 90%). YouTube has offered similar streaming licenses for some time, though to be distributed on YouTube, you must deal with a distributor.
This new YouTube subscription model is similar to the wildly popular Netflix (30 million US subscribers), Hulu Plus (~4 million subscribers), and Amazon Prime ("in the millions" according to the New York Times). What makes this YouTube model different is that it allows access to individual channels instead of the provider's entire library. The price point, then, is different. Instead of a $8.99/month pricetag for Netflix's extensive library, subscriptions to YouTube channels will be a few bucks a month. Some channels, it seems, will have ads (like Hulu Plus), and some will not (like Netflix).
Content owners are eager for their videos to be on the country's most popular streaming video site, but they're not thrilled with the amount of money simple YouTube ads pull in for them. Subscriptions give consistent, relatively hefty revenue streams to the content owners. It's good for the creators, but does it crowd out certain consumers?
While we don't yet know who's going to be participating in the YouTube plan, it's time we thought about what encouraging subscription looks like.
Piecemeal Subscription Models Are Expensive for Consumers of Diverse Content
Why did MP3.com fail as an alternative to Napster? Because MP3.com didn't have the songs people actually wanted to listen to. Services like Spotify and Grooveshark are popular for music fans because they host virtually all the songs people want to listen to. Artists, still stuck in exploitative record contracts, often don't think these services pay them enough; however, these are the services people are starting to prefer to use to listen to music.
How much longer can movie and TV streaming sites go on with exclusive deals? If people like diverse content and can't reasonably be fulfilled by just one service, that's a pretty hefty monthly subscription bill. Who wants their most loyal and ardent fans begrudging how much they have to pay to access their content?
Regulating Shared Subscriptions Is an Unsavory Job
Many of those loyal and ardent fans have a solution for this problem: they share logins and passwords for their subscription services. How can one participate in water cooler section conversations about "Game of Thrones," "House of Cards," and the Criterion film your co-worker just saw without having subscriptions to HBO GO, Netflix, and Hulu Plus (or, alternatively, HBO, Netflix, and your local video store)? These streaming services are in a pickle when their most active users are also the most active users of other platforms and don't want to shell out the extra dough. No one wants to ruffle the feathers of their beloved "tastemakers," and so this is, for now, the problem with streaming that cannot be spoken of.
Subscriptions Might Not Be a Pain Once You're Paying, But They're a Roadblock When You're Not
Say you just want to watch one episode of a television show -- for a project, for nostalgia, you've given up on your cable subscription -- and you're not a subscriber of the service. Well though it may be relatively cheap, it's annoying and ultimately unlikely that you'll subscribe...especially if you're on several other streaming services. And in these cases, piracy is often a solution (see cartoon below).
Subscriptions are Hard to Manage
Do you know that episode of "Portlandia" (streaming on Netflix) where Carrie can't pull herself together to watch "The Cabinet of Dr. Caligari," which prevents her from actually using her Netflix Disc subscription? Well, streaming subscriptions, if we begin to accrue too many, can be similarly a bad investment. Monthly subscriptions are easier to let go unused than other transactions for content.