Sophie Chen
May 10, 2013

YouTube paid channels: Media experts assess the impact for Asia-Pacific

SINGAPORE – Confirming one of the worst-kept secrets in recent memory, YouTube has officially announced the launch of paid channels, a move sure to impact agencies, brands and TV providers alike as it reverberates through the video ecosystem.

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YouTube has actually only launched a pilot programme, which has already attracted 30 partners, including Cars.TV, BIGSTAR Movies and National Geographic Kids. The paid channels carry subscription fees starting at US$0.99 per month. The channels all offer a 14-day free trial and discounted yearly rates. Partners can chose whether to also employ advertising in their paid channels.

A YouTube spokesperson told Campaign Asia-Pacific that these paid channels are the latest to join the site's community of channels, live streams, viral videos, movies, and TV shows, which boasts more than 1 million revenue-earning channels globally.

Arun Kumar, president of MAP G14, called the move a reflection of a broader move toward custom content, which agencies like UM and IPG Mediabrands have been developing and reacting to as well.

“With entertainers and standup comedians having long used YouTube to start their own channels, it is about time for YouTube to develop their own content,” he said. “This new move would mark the first move to put a structure on how people accessed the content on its site.”

Guy Hearn, director of communications insight at Omnicom Media Group, Asia Pacific, told Campaign Asia-Pacific that YouTube has high levels of awareness and usage in many parts of the region and is already something of a default starting point when searching for video content.

“Having specialised paid content will only increase that perception, especially as the number of paid offerings grows,” he said.

The latest move came after content creators’ request for more flexibility in monetising and distributing content, according to the video-sharing website.

Under the pilot programme, the partners are able to build successful channels on YouTube without changing the ad-supported model, and each partner can choose if they want to show ads on their paid channel, which will be shown in the channel description, according to the YouTube spokesperson.

The move certainly puts more pressure on traditional pay-TV, which has already seen advertisers and audiences shifting to alternate screens.

Nick Seckold, head of digital at Mindshare Asia Pacific, told Campaign Asia-Pacific that although YouTube is creating more competition in traditional TV markets, that can only be a good thing for consumers, as they will get access to better content across multiple screens.

He said this is also an opportunity for Google to attract a greater share of 'brand dollars' to its advertising platforms, especially in Asia, where brand advertisers have been slow to react to the opportunity on Google properties. 

“Advertisers should see this as a positive move as they will be able to better target premium audiences against specific programs much in the same way they do today with traditional TV,” he added.

Lee Smith, CEO of platforms and president of Annalect for Omnicom Media Group Asia-Pacific, agreed that a paid content product has significant advantages in several markets in the region, given the static nature of the current TV options.

“Traditional cable providers may have to get creative on forced bundles and offer more a la carte options in order to compete with the attractive micro-consumption options via YouTube,” he said.

Smith cited an example of the YouTube broadcast deal with India Premier League Cricket, which has already proven that the content format and delivery works very well. “Monetising vertical content via paid users is a viable next step,” he added.

YouTube paid channel might be a great option for whoever has a deep interest in niche content or want on demand access to one favourite show.

While it’s great opportunity for Asian content makers to build audiences across the region, Hearn pointed out the extent to which consumers will be initially willing to pay for that content will depend on the quality of that content.

“This further highlights that consumers are increasingly agnostic as to the screen they use to enjoy the content that they want,” he said. “All content providers will need to win the battle for quality of content and ease of access.”

With various streaming sites that are available for consumers to download content, Seckold said ultimately, consumers will decide the source of their favourite content based in its quality.

He suggested that You Tube and its content partners could consider offering incentives to ensure consumers remain engaged and can justify a subscription fee.

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