While YouTube is currently the reigning king of online video, fierce competition from longtime rivals like Vimeo and up-and-comers like Vessel ensures that the service can never rest on its laurels for long. Now it appears that YouTube may be considering launching a subscription video-on-demand (VOD) service, according to Variety‘s Todd Spangler.
Details are few and far between, as the company hasn’t made an official announcement, but the article mentions that a video subscription service could be modeled on YouTube’s own Music Key, which launched in beta form last year. Music Key offers ad-free access to music videos for an introductory price of $7.99.
The similarities to Music Key don’t seem to end there. A YouTube partner was apparently approached by the company last year in regards to a licensing deal for on-demand content, and was warned that if they didn’t agree to the terms, they could be denied future ad revenue. A similar tactic was used dealing with indie record labels when YouTube was revving up Music Key last year.
While this move presumably wouldn’t benefit most YouTube channels, it seems likely that more popular content creators would get a cut of the profits. Keith Richman of popular YouTube content producer Defy Media says “Anything YouTube does to create new monetization, we would benefit from.”
This additional revenue stream could also prevent popular YouTube creators from jumping ship to competitors, as Freddie Wong and his studio RocketJump did last year. RocketJump’s Video Game High School was a major hit for YouTube, but when Wong approached YouTube about funding a new project, they weren’t happy with the budget. Now the new series will be available exclusively via Hulu.
While YouTube’s growth doesn’t seem to be slowing, it’s still fighting to increase profits. Still, there’s something to be said for brand recognition. Katherine Grace of New Form Digital Studios sums it up, saying “If you’re in digital video and you’re not on YouTube, it’s like saying, ‘I’m building a website, but I don’t want to be in Google search.'”
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