(Mirror Daily, United States) – Alphabet’s YouTube has pulled off another experiment that’s meant to increase the company’s revenue on the video service front. With plenty of the big media companies on board, YouTube will offer users ad-free content for only $10 a month.
According to inside sources, the media players interested in partnering with Alphabet include 21st Century Fox’s Fox Sports, Time Warner Inc.’s Turner cable unit, Comcast Corp.’s NBC Universal, and A+E Networks Inc. But these are not all, as the list will soon expand after YouTube completes negotiations with others, including Walt Disney Co.
Getting these partners to sign a deal is nothing short of a success for YouTube, as the company was trying to make said above media giants agree on its terms. Most of these media companies were previously inclined to refuse signing the deal, saying that its revenue sharing terms were not to their advantage.
To be more precise, the deal proposed that YouTube will keep 45 percent of every dollar generated through subscribing to the ad-free service, while the remainder will be shared among the content creators proportionate to how much time consumers spend on their videos.
This is where YouTube and the big players had trouble agreeing, because many of them thought they deserved greater revenue share compared to smaller YouTube creators, seeing that they will offer superior content and bigger brand names that would attract more prospective users to subscribe to the service in the first place.
YouTube was able to convince many to sign without changing any of its revenue sharing terms; negotiations are still underway with the companies that are still resisting the current terms. This paid service is an interesting turn from the ever-free YouTube, a platform that got its bread and butter from advertisements.
After Google Inc. was acquired by Alphabet Inc., some important changes were made inside the firm. In spite of the billion global users who view billions of hours of videos per month, YouTube isn’t bringing in lots of profit. This is where the new subscription service comes in, designed to up its earnings stream.
It’s a bold move, seeing that YouTube has made it compulsory for the content owners to sign on to the service if they don’t want their videos to be removed altogether from the platform. And seeing that having access to the most popular broadcasting network on the planet is rather important, most accepted without much fuss.
Hurt in their prides by less than favorable terms, other media companies are still trying to negotiate some additional benefits out of the deal, such as more promotion guarantees from YouTube.
Image Source: Marketing Land
Joe Hennessey
