Google's YouTube is still interested in offering paid subscriptions on the popular video site, as Google seeks additional content providers to license premium content.
YouTube has already discussed movie and TV licensing agreements with several studios -- but the lack of advertising revenue, despite a large viewership -- has copyright holders worried. If YouTube is able to get Hollywood on its side, advertisers may be more interested in signing on. There is, however, an on-going concern that posting full-length movies on YouTube could negatively impact DVD sales and cable TV revenue streams.
YouTube has more than 125 million users per month, significantly higher than No. 2 Hulu, but hasn't been able to attract the type of advertising Hulu has been able to receive.
Furthermore, BSkyB has ended talks with YouTube to license Sky's pay-TV content through the site, with another major movie studio also walking away from a possible YouTube deal, according to sources.
"We're making some interesting bets on long-form content; not all content is accessible to us with the advertising model," said David Eun, Google VP of content partnerships, in a statement to Reuters. "The biggest opportunity today is advertising and we've just begun to scratch the surface."
YouTube also is interested in letting content owners determine which advertising model they want to use.
If a subscription model doesn't work, YouTube also said it would consider a rental fee, though it would have to compete directly with Amazon and Apple. I believe YouTube needs to focus more on an ad-based revenue models in the near future, as competing with Amazon & Apple on TV and movie rentals could be difficult. There's no doubt that YouTube has an enormous user-base, but the site needs to find ways to get more people to view and click on more ads.
