YouTube's forthcoming paid subscription offering is rapidly taking shape, and is expected to become available within the next few months, sources familiar with the matter tell The Verge. The company told creators of popular channels today that the offering, which does not yet have a name, is coming soon. It will offer ad-free videos as well as the ability to store videos offline on their mobile devices, for a price expected to be around $10 a month. It will also let creators put their videos behind a paywall so that only subscribers to the premium version can view them, sources said. (Bloomberg published a letter sent to creators today.)
The offering may also include lower-priced subscriptions for specific categories, such as music and children's programming. (YouTube Music Key, which serves as a model for the all-access subscription, has been in invite-only beta since November. At the time, Google said Music Key would cost $7.99 a month when it comes out of beta.)
For creators, YouTube's carrot comes with a stick
The subscription offers big channels a new way to make money. While YouTube will still take roughly 45 percent of all advertising revenue generated by the channel, they're also offering partners a cut of the subscription money. Subscription revenues will be pooled, with partners receiving 55 percent of the total. Individual partners' cuts will be apportioned based on how much time their viewers spend watching their channels, though, so even medium-sized channels may not earn meaningful revenue from the subscription.
And YouTube's carrot comes with a stick — creators are required to participate in the subscription offering, or every video on their channels will be set to private, sources said. The move will likely upset some creators, who may object to aspects of the program. "While we can't comment on ongoing discussions, giving fans more choice to enjoy the content they love and creators more opportunity to earn revenue are always amongst our top priorities," a YouTube spokeswoman said in an email.
YouTube's move comes amid increasing competition in the world of online video, particularly premium video. Vessel, created by the team behind Hulu, launched last month with a business model designed to address the gripes of YouTube creators, who have long complained about the relatively few ways they can make money on the platform. Vessel also offers creators a cut of subscription revenues, along with a higher percentage of ad revenue.
The letter sent to creators is below.
Update, 3:07 p.m.: Updated to add comment from YouTube.