YouTube Launches (Ad-Free) Paid Subscription Channels

YouTube officially launched its anticipated pilot program for paid subscription channels. The program debuts with 53 paid channels and subscription fees starting as low as $0.99 per month. All channels have a 14-day free trial with. And all are ad-free.

Users subscribe to the channels from a computer, and then have access to their paid channels on their smartphones, tablets and TVs. YouTube says the ability to subscribe from mobile and other devices will come soon.

Early content partners include UFC, Comedy.TV and National Geographic Kids.

Jim Henson Family TV has both an English and Spanish channel which feature full-length episodes of shows like Sid the Science Kid and Fraggle Rock. The Spanish channel subscription is $1.99 per month or $17.99 per year, and the English channel is $2.99 per month or $24.99 per year.

The big questions, of course, are 1. will consumers pay for the content they have been getting for free either from YouTube or other sources (many episodes of Sid the Science Kid are available for free at PBS.org, for example), 2. will content producers be satisfied with the revenue split generated from subscriptions versus ads, and 3. will paid subscription channels stay ad-free?

YouTube says that over the coming weeks it will be rolling out paid channels as “self-service feature for qualifying partners”. This pilot is as much a test of whether content partners will see value in opting-in to the program — and continue to support their channels with new content — as it is about whether consumers are willing to pay for premium content.

The ad-free aspect of the paid channels does give YouTube a value proposition that differentiates it from services like Hulu. YouTube has invested $100 million into ad-supported channels with original programming, and this new pilot program gives YouTube, and their content partners, an opportunity to test both revenue models.