On 20th September, YouTube announced the demise of its paid channel service, a facility that has been active since 2013. The service allowed individual YouTube channels to charge viewers a monthly fee for access. Channels like National Geographic and Sesame Workshop required the audience to pay a small fee for viewing videos. However, since its inception itself, the concept did not work with users. At its last count, the service was being used by less than 1% of creators.
The paid channel service was one of YouTube’s first attempts at introducing a charge for viewing content. Since then, it has introduced other options for users which have been far more popular. YouTube Red (currently available on in the United States, Australia, New Zealand, Mexico, and Korea) is the channel’s subscription service that offers exclusive content along with advertisement free viewing and downloadable content. It overshadowed the paid channels initiative since its inception as it offers much more value, including free Google Play Music access and the ability to use the YouTube app in the background on smartphones.
This move has been somewhat surprising as other companies in the field like Amazon are moving towards individual channel subscriptions. But considering the poor performance of the service in the last four years, it made sense for YouTube to slash the service. The user base of YouTube has varied expectations from channels as compared to other forums. Moreover, the needs of creators on the platform didn’t appear to be aligned with the paid channel facility.
The company is expanding its sponsorship based program which lets users purchase digital goods (such as custom emojis, badges, access to sponsor only chat etc) in exchange for a recurring monthly payment. The program has been in Beta mode until now, and was only available to specific YouTube Gaming channels since late 2015. Since it has been doing well for popular channels, it will now be available to all ‘gaming’ channels. YouTube is also beginning to test the option with a small group of creators on the main application now.
It’s too soon to make a statement on whether sponsorships will sway the market drastically. However, the large user base of YouTube is sure to ensure some impact if the model is extended to the entire application. It will open up the scope of the company, and may pave the way to many more innovative changes.