YouTube is planning to launch a paid subscription video service later this year. But the Google-owned company is having a tough time getting some of its content partners to sign up, according to several sources at publishers and multichannel networks.
YouTube approached a number of video publishers and multichannel networks (MCNs) late last year, asking each to sign a “subscription offerings amendment” that would make all of their YouTube content available through a paid service, according to Digiday’s sources. A sleek, ad-free video subscription service could generate a pivotal revenue stream for YouTube, which has reportedly failed to turn a profit despite attracting over a billion monthly viewers. Yet several of YouTube’s current content partners have been reluctant to sign on the dotted line.
“The amendment was so general,” said an executive at one publisher with a major YouTube presence. “It’s basically saying, ‘Hey, sign up and your content will be behind a subscription wall.’ But there was no revenue share or any guarantee you wouldn’t just lose out on the ad revenue. It made us really nervous. We are reticent to sign something without knowing what it actually means for us financially.”
That publisher has yet to sign the amendment, waiting for more information and revisions from YouTube before agreeing to pipe its content into a YouTube subscription service. YouTube itself has yet to nail down the scope of its subscription plans, the executive told Digiday, even though YouTube’s content chief Robert Kyncl suggested at Recode’s “Code/Media” conference last week that YouTube is putting the “final tweaks” on the service.
One MCN executive said YouTube intended to launch the service in the first quarter of 2015, but will miss that launch window. A YouTube spokesperson declined to discuss that assertion or anything about the subscription service on the record.