The Bauminator

Paying For YouTube

5/10/2013 4:25 AM

Now that YouTube has unleashed its subscription video play – an initial slate of 53 channels starting at $0.99 per month – it begs the question: Will anyone actually pay for any of them?

But first, here’s a little financial reality check. Only one channel (NuestroPix) costs 99 cents per month. SmartTV, at $9.99 per month, represents the tippy top of the top shelf fare. If you were to pay for all the paid channels in YouTube’s first batch (and not buy any of the discounted, annual subscriptions), it would set you back $190.47, or about $3.59 per channel, per month.

YouTube is likely to get some buy-in from consumers because there’s an audience for every niche (Fix My Hog Premium, anyone?), but a study from IBB Consulting, a Philadelphia-based company that counts cable operators and media companies among its clients, does shed some light on YouTube’s market potential.

IBB’s survey of 250 Web users last month showed that consumers aged 18 to 24 subscribe to the greatest number of free YouTube channels, but an older segment – those aged 25 to 34 – are the most likely to pay for YouTube content, perhaps because that group might have access to more disposable income.  

According to the survey, online users who are willing to fork out a few bucks are more likely to do so in the genres of sports, comedy, drama, news, and “unscripted” shows. If so, then YouTube subscription channels seemingly well positioned to attract a paid audience include Laugh Factory VIP, UFC Select, Primezone Sports, PGA Digital Golf Academy, and Comedy.tv. Those online users unsurprisingly would also have the most interest paying for content from mainstream sources.

The study also offered a picture of what the ad-supported, free world of the YouTube channels universe looked like before the paid offerings entered the picture. About 18% of online consumers subscribe to at least one YouTube channel, while 9% subscribe to between one and five channels, and 9% subscribe to more than five channels. But, again, that’s for YouTube’s free channels, where the only requirement is a click of the mouse.

IBB conducted the survey before YouTube’s official announcement, but, like the rest of us, the firm was aware of all the rumors circulating that the announcement of YouTube’s subscription strategy was relatively imminent.

“We did the survey to get a pulse. That was the impetus of it,” said IBB partner Jonathan Weitz, noting that the company’s clients are always looking for some perspective on what consumers want.

Conducting a new survey after the fact should give IBB an even better fix on what the consumer temperature is for YouTube’s new subscription slate, but last month’s study “tells me there’s good willingness to pay for high quality content” from a source such as YouTube, Weitz said.

Each channel also comes with a 14-day free trial, so at least YouTube’s giving viewers a risk-free way to to try before they buy. But time will tell if the quality of YouTube’s paid channels will be high enough to keep viewers on the hook and shell out a few bucks month in and month out.