YouTube is to launch a new video subscription service, according to a fresh report.
In a recent Variety piece discussing the troubles YouTube is facing as it hits its tenth anniversary, it’s mentioned that Google’s online video arm is planning its own video on demand service.
Apparently, the new service will be modelled on YouTube Music Key, the music video service launched last year. YouTube Music Key provides unlimited ad-free access to music videos for $7.99 per month.
Of course, for that price you also get access to Google Play Music, Google’s Spotify-like music service, which is quite an incentive to sign up.
According to the report, YouTube has been reaching out to content providers with news of this impending VOD service.
It seems as if Google and YouTube are attempting to strong-arm content providers into signing up to the new video on demand service. It’s claimed that if these video partners don’t agree to the terms of the subscription service, they will be excluded from any future advertising revenue.
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YouTube may need such a monetising scheme to stay on top of its rivals. After all, it emerged last month that YouTube isn’t actually making any money.
The Wall Street Journal claimed that while YouTube posted revenue of $4 billion in 2014, it didn’t end up contributing to Google’s earnings at all. In other words, it’s breaking even at best.
Massive investments in content and equipment, coupled with relatively poor advertising income (because most viewers don’t use YouTube’s front page) mean that YouTube isn’t making the kind of profit its billion users a month might suggest.