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YouTube channels at $1.99 per month could launch this week

50 channels tapped for content-for-pay trial

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Video streaming giant YouTube is nearly ready to begin offering some of its customers a subscription pricing model for their content channels, according to reports.

Citing inside sources, the Financial Times claims the Google-owned service has been working on getting its subscription paywall up and running for months, and that it could start offering it to select content creators as early as this week.

The initial trial of the plan will involve up to 50 YouTube channels, sources say, with pricing for each channel beginning at $1.99 per month.

That's roughly in keeping with earlier rumors, which suggested that YouTube would offer subscription channels at anywhere from $1 to $5 per month.

The Financial Times report did not disclose what the revenue split between YouTube and its content creators might be, but those earlier reports said YouTube planned to take 45 per cent. If true, that's significantly more than the 30 per cent that companies like Apple and Google take for app sales, for example.

There has also been no word on which channels would get the subscription treatment, though it's fairly safe to say we're not talking about funny cat videos, here.

Over the years, YouTube has been slowly evolving away from its original user-generated content model, toward one where the service plays host to a variety of slick, professional videos from well-funded creators. Most of the major Hollywood studios now have YouTube channels, as do TV networks ranging from HBO to the BBC.

According to the FT report, the video service has also doled out some $200m in advances to independent content studios over the last 18 months – so it's clearly expecting some of this stuff to translate into big bucks.

It's a strategy that's in keeping with those adopted by rivals such as Netflix and Hulu, both of which offer subscriptions and both of which have commissioned high-budget original content featuring Hollywood celebs.

YouTube still bests all comers in terms of advertising revenue. But even the $1.3bn in video ad sales the company pulled in last year paled in comparison to the staggering $50bn Google earned in 2012 from all of its various ad revenue sources.

Presumably, YouTube is banking on subscription pricing as one way to bolster its growth while it waits for the online video-ad market to firm up – and this likely won't be the only idea it tries in the coming months.

"We have long maintained that different content requires different types of payment models," the company told Advertising Age. "The important thing is that, regardless of the model, our creators succeed on the platform. There are a lot of our content creators that think they would benefit from subscriptions, so we're looking at that." ®

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