Google is planning to release a subscription model for its popular online video sharing website YouTube, perhaps as soon as within 2015, that will allow users to watch content without being disturbed by advertisements.
The revenue that Google will be earning from such a subscription model will be shared with content creators, the company said in a letter that was acquired by Bloomberg.
The new direction will also put YouTube in direct competition with Netflix, Hulu and other streaming services.
"By creating a new paid offering, we'll generate a new source of revenue that will supplement your fast growing advertising service," said the letter to video creators.
Google has been making moves to charge users when viewing content, with the introduction of a music service based on subscriptions within YouTube late last year and the investment of hundreds of millions of dollars for talent as well as the development of production facilities for boosting the original content that can be found on the website.
"While we can't comment on ongoing discussions, giving fans more choice to enjoy the content they love and creators more opportunity to earn revenue are always amongst our top priorities," said YouTube in a statement, eluding to comment on a timeframe for the rumored service.
The price of the monthly fee for an advertisement-free subscription has not yet been set. It is also possible that a subscription will provide users with access to content even when offline.
In the letter, the YouTube team is alerting video creators that they would have to agree to adjusted terms caused by the release of the subscription service, such as the inclusion of clips for the subscription product.
BTIG analyst Rich Greenfield said that times are changing to where consumers are figuring out how to avoid being exposed to advertising, with the prevalence of services such as Netflix leading to advertisement-free content.
The decision to launch subscriptions for YouTube is a part of Google's broader direction of looking to create more income that is not from advertising. Users can now purchase or rent movies on YouTube, including popular titles such as The Interview and Interstellar. Back in 2013, paid channels were launched in YouTube, featuring premium videos. The Music Key Beta service was launched by YouTube in November, allowing users to access advertisement-free music for a monthly fee of $10 with offline access.
Online video maker Defy Media president Keith Richman believes that YouTube's moves for improved monetization are great news for content creators. Richman also expressed his support for YouTube's ability to successfully launch a subscription service.
Photo: Esther Vargas | Flickr
