YouTube has a billion unique viewers watching for over six billion hours a month and is apparently watched by more 18-34 year olds than any single cable network in the United States. The online video site now offers a paid subscription option for video channels, in addition to its advertising model. Asked when YouTube would surpass television, Eric Schmidt, the executive chairman of Google, said: “That’s already happened.”
“It’s not a replacement for something that we know,” he went on to explain. “It’s a new thing that we have to think about, to program, to curate and build new platforms.”
Not content with a billion viewers, he added: “Wait until you get to six or seven billion.”
Estimates vary but the current world population is around seven billion, while less than 40% of them use the internet.
The time spent watching YouTube is currently marginal compared to television. In the United States, comScore estimates that over 150 million viewers watched an average of nearly 400 minutes a month. That is significant, but nothing like the six and a half days a month the average American spends watching television.
Nevertheless, there is a sense that the whole world is watching YouTube and as a platform it is bigger than any single broadcaster. YouTube is available on virtually every connected video device, from smartphones to smart televisions, and offers access to a global audience.
By and large, YouTube viewers are all watching different things, often at the recommendation of others. It is both a personal and a social experience and as such it is very different to television as we have known it.
Since 2007 YouTube has offered a partner programme and there are now over a million channels generating revenue on YouTube through a share of advertising income.
Now YouTube is launching a pilot program for a small group of partners that will offer paid channels on YouTube with subscription fees starting at $0.99 per month, with $2.99 being more typical. Partners will apparently receive”the majority” of that revenue. Every channel has a 14-day free trial and many offer discounted yearly rates.
Once subscribed from a computer, registered users will also be able to watch paid channels on their connected phone, tablet and television, and will soon be able to subscribe from more devices.
The 50 or so pilot channels are a rather random selection. They include Acorn TV, which promises a selection of classic British television programmes, shown without commercials, for $4.99 a month.
So far absent are programmes from the main American networks, although National Geographic is offering a kids channel, consisting mainly of cartoons.
YouTube has gone a bit quiet about its previous efforts to launch channels in association with traditional broadcasters.
As Robert Kyncl, the head of content for YouTube said: “I thought that YouTube was like TV, but it isn’t. I was wrong. TV is one-way. YouTube talks back.” In his view, “TV means reach. YouTube means engagement.”
While the early indications are not promising, the implications of the subscription model are significant. There is the potential to move from the five hundred channel universe of cable and satellite to millions of niche channels with individual subscriptions.