In the subscription-based video streaming market, which is dominated by Netflix, Amazon and Hulu, YouTube is comparatively a new entrant. Despite having perhaps the largest share of users watching free videos on YouTube, its recently launched subscription based service YouTube Red is yet to gain traction among users.
For this purpose, YouTube executives are reportedly in talks with Hollywood studios and production companies for gaining streaming rights of original TV series and movies for YouTube Red. This was revealed in a report by the WSJ.
The report remains unclear about what kind of TV series and movies YouTube is looking for. But it did mention that unlike Netflix and Amazon, which initially started by offering catalogs of old movies and TV shows before coming up with original content, YouTube is looking for original content only.
Netflix, Amazon and Hulu license many older movies and TV series that have already run elsewhere, while YouTube is focusing on new material,
the WSJ wrote.
The report also mentions, that the executives involved in the dealings and discussions include Susanne Daniels, the former programming chief of MTV who joined YouTube in the summer, and Kelly Merryman, a former Netflix content executive who joined YouTube in late 2014. These officials are reportedly using existing relationships between Google Play and the movie studios to negotiate the streaming deals.
Although YouTube has been the stand-alone free video website for many years, but the kind of success Netflix and Amazon have received from the paid subscriptions to their original content indicate towards the changing trend.
According to a research by Digital TV Research Ltd, the revenues from subscription-based video streaming websites are going to surpass those from free ad-supported services by 2020. Moreover, global revenues from online TV and video services are also estimated to reach $51.1 billion in 2020, up from $26 billion this year.
This led YouTube to come up with its own subscription service YouTube Red to offer exclusive and premium content to subscribers at $9.99 a month. Given the strong user base of YouTube, YouTube Red is expected to give a tough fight to the major players if it manages to come up with unique content to offer to its paid users.
It is already planning to release at least 10 of its own movies and series, starring YouTube stars like Felix Kjellberg, known as “PewDiePie”. This will be made available to YouTube Red subscribers from 2016.