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Brian Stelter from the New York Times has the story.
YouTube on Thursday detailed its plan to let producers sell paid subscriptions to their videos, creating a prominent new marketplace for programming on the Internet.
The first paid video channels appeared on the sprawling video Web site, a unit of Google, Thursday afternoon, with subscription rates ranging from 99 cents to $7.99 a month. The early participants include Sesame Workshop, the producer of “Sesame Street,” which streams full episodes of the children’s show to paying subscribers; Ultimate Fighting Championship, the mixed martial arts league, which streams classic fights to fans; and The Young Turks, a progressive talk show.
YouTube identified about 30 of these partners on Thursday and said other video makers would soon be able to set up their own paid channels. In a conference call for reporters, Malik Ducard, the director of content partnerships for YouTube, suggested that this “self-service feature” was the most important piece of the announcement.
“As we roll out wider and as we roll out self-serve, you’ll see a lot of innovation,” he said, predicting that homegrown YouTube stars with fan followings would set up paid channels.
The arrangement gives the creators of videos — some of whom have expressed dissatisfaction with the payments from the advertisements attached to their videos — a new way to profit from their popularity. The plan also gives YouTube a new source of revenue, although there are widespread doubts about whether people will be willing to pay for channels, since the name YouTube is almost synonymous with free streaming video on the Web.
Absent from the list of partners on Thursday were all of the biggest media companies in the United States, like the Walt Disney Company and Comcast, which owns NBCUniversal. Instead there were start-ups like the Rap Battle Network, BabyFirstTV and Cars.TV. Some of the partners have tried to gain distribution on cable and satellite television systems, but say they view YouTube as another appealing way to gain an audience.
Ducard said all the paid channels would have 14-day free trials and many would offer discounted yearly rates for subscribers. Viewers will pay with Google Wallet, the same system Google’s app store uses. As the channel owners set their own prices, YouTube and the partners hope to find out quickly what price ranges are most successful.
YouTube declined to say exactly how it would split the revenue from paid subscriptions with the producers of channels. It now keeps 45 percent of the revenue from the ads it sells and gives producers the rest. Ducard said the subscriber revenue split would be “very similar to the ad-support business.”