YouTube Adds Paid Channel Subscriptions

Online video site YouTube has kicked off its paid subscription plan where a small group of channels can charge a monthly fee for their content.There are 53 channels available in this pilot program, including UFC, Jim Henson Family TV (Sesame Street) and National Geographic Kids. All channels have 14-day free trials, followed by subscription fees starting at $0.99 a month.

Prices start at $.99 per month, paid via Google Wallet. Users get a 14-day free trial to channels, which are also discounted if you subscribe by the year. Once signed up for a paid channel, you can suck down as much video as it has to offer.

With just a handful of offerings, and none from major broadcast channels (at least that it announced) YouTube isn’t really taking on Netflix or Amazon, and certainly not your local cable company. At least not yet. But with this new pricing model, it’s certainly now in the position to eventually do so. WhileSesame Street‘s not exactly Game of Thrones, today’s news does bring us at least a small step closer to the dream of a la carte programming.

This is a solid business move, even if advertising will almost certainly remain YouTube’s main source of income. It helps YouTube promote itself as a complete video delivery platform by giving producers yet another way to earn money there. YouTube already had ad-supported content, live pay per view programming, rentals, and purchases. Subscriptions were a big missing piece of the puzzle for a couple of reasons.

Sometimes it makes more sense to charge a recurring monthly fee than a pay-per-episode model or ads. Subscriptions make a lot of sense for sports programming, like UFC, where a rabid fan base may be willing to pay for absolutely everything. A subscription also lets users dive deep into content–like archives of old Sesame Street episodes–alongside new ones. Finally, it also just lets YouTube do what services like Hulu and Spotify were already doing, with different pricing tiers for different levels of subscriptions. What’s more, the lion’s share of the revenue goes to producers, not YouTube, just as with YouTube’s other payouts, be they based on ads, rentals or pay per view.

With channel subscriptions starting at less than a buck, it seems like a pretty easy way for consumers to dip into channels without actually having to dive. For YouTube and it channel partners however, this new plan is definitely a leap of faith.