Korean pop-star Psy’s “Gangnam Style” video brought in nearly .08 cents per view for YouTube. That may not seem like much, but the video broke YouTube viewing records and actually earned about $8 million in advertising, having been watched a billion times. Perhaps a pay-per-channel style would have brought in even more for the artist, and YouTube.
Cable television took a huge step many years ago when it offered pay-per-view to its already paying cable TV subscribers. It worked though and people today buy pay-per-view shows for upwards of $49.99, for some sporting events. Charging for video content has been a growing trend from the days of free television and today on the Internet we have sites such as Netflix that have done very well in the on-demand Internet video streaming arena, bringing in even $1.5 billion in sales in 2011.
Quite ironically though, although there has been a huge demand to video content on the Internet and Netflix did exceptionally well in 2011, in Q3 2012 they fell sharply though, tumbling down 88% from the previous year. The reason according to the Motley Fool is because of the growing cost of video content for companies such as Netflix. YouTube has recently been said to now be eyeing charging for video content as well, but they probably will not face the issues that companies such as Netflix are enduring though for their premium Hollywood priced content.
Google has been well recognized for their value-pricing. The AdWords project is Google’s number one revenue generator and primarily because the value of the ads is almost always surely worth the price businesses pay to have them. Google appears to be taking on a similar low-cost pricing philosophy with the a new YouTube service they have in the works. One that will offer paid subscribers a chance at video content that will cost between $1 and $5 per month, according to AdAge and the WSJ.
This latest move by Google YouTube potentially changes the entire video industry, once again. As more and more people simply rely on computers and the the Internet for their daily video content, even cable providers are having to change their pricing attitudes towards consumers, or face extinction. With Google YouTube now charging a mere $1 to $5 per channel per month, even large mainstream cable operators may potentially now have to change their cable packaging plans, many which currently range to even $100 per month and beyond.
There aren’t too many details as of yet as to what channels YouTube may begin charging for, but AdAge writes that they believe “YouTube will lean on the media companies that have already shown the ability to develop large followings on the video platform, including networks like Machinima, Maker Studios and Fullscreen. YouTube is also looking outside its current roster of partners for candidates.”