One of the big challenges for social media companies is generating significant revenues and meaningful profits. With this in mind, YouTube is always on the look out for new revenue streams. Here is the latest idea. What do you think about it?
As reported by Brian Stelter for the New York Times: “YouTube this week will announce a plan to let some video makers charge a monthly subscription, according to people with knowledge of the plan. The overwhelming majority of videos on YouTube, a unit of Google, will remain free to all, but the plan will let the company’s partners try out a second source of revenue, analogous to the flexible pay walls that some newspapers and magazines have adopted. There will be subscription channels for children’s programming, entertainment, music, and many other topic areas, according to the people with knowledge of the plan, who spoke on condition of anonymity because they had been asked by YouTube not to comment publicly yet. Some channels will cost as little as $1.99 a month. These won’t be channels in the television sense of the term; rather, they will consist of libraries of videos on demand, much like the thousands of free channels already on YouTube. Some of the video makers who have worked with YouTube on the subscription option want to convert existing fans to paying customers; others hope to distinguish themselves by selling archives of old TV episodes.”
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Photo by Philip Montgomery for YouTube
While I believe this subscription based YouTube will bring in some profit for video makers all over the world, the way they are making money already seems fair to me. The current way they make profits on youtube is from the sheer amount of views on videos, and the way youtube can manage to pay people for this is because of all the advertisements before videos and on the side of a screen. If a video gets 50 millions views, that means that 50 million people had also seen the ads related to the youtube page. Advertisers can reach a very broad audience on youtube and that is why advertising on there is so popular. Some of the most popular YouTube channels make enough money to be very wealthy with the current method, so I don’t know if the fewer views and $2 will match the money they are already making with free videos and tons of views.