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YouTube Bows SVOD Platform

9 May, 2013 By: Erik Gruenwedel

Streaming platform aims to compete with Netflix, Hulu Plus and Amazon Prime, albeit with limited content

YouTube May 9 officially launched a subscription video-on-demand pilot service, with monthly fees starting at 99 cents per content channel. The Google-owned social video giant said it currently has 1 million third-party content channels generating incremental ad-supported revenue.

Channels include content from National Geographic, RLJ Entertainment’s Acorn TV, Magnet Releasing, “Seasame Street” creator Jim Henson Family TV, UFC, Mark Cuban’s HDNet, and BigStar Movies, among others.

The new platform, which competes against SVOD pioneer Netflix, Amazon Prime Instant Video and Hulu Plus, targets about 50 of its content channels, with subscription revenue split between YouTube and third-party content partners.

Each participating channel has a 14-day free trial, with some offering discounted annual rates. For example, “Sesame Street” will be offering full episodes on their paid channel when it launches. And UFC will stream classic mixed martial arts fights.

RLJ Entertainment, which owns Image Entertainment and Acorn Media, is also launching OnCueNetwork featuring African American and minority talent. Programming includes "35 & Ticking," starring Kevin Hart and Meagan Good; "All Things Fall Apart," starring 50 Cent and Lynn Whitfield; "The Last Fall" featuring Lance Gross, Nicole Beharie, and Vanessa Bell Calloway; and stand-up doc, "I Ain’t Scared of You," featuring the late comedian Bernie Mac.

“This announcement marks the beginning of RLJE’s goal to become a major player in producing targeted digital entertainment to audiences that are underserved by existing outlets," said RLJ namesake Robert L. Johnson, founder of B.E.T. "We believe the subscription model presents not only an opportunity to develop original programming but also create further shareholder value."

Cinedigm's Docurama channel features a curated playlist of feature-length documentary films, one-quarter of which are new or recent releases. The initialmonthly subscription fee is $2.99. Content is refreshed weekly, including films from the now-running Docurama series showing in select theaters nationwide through June.

"This is the start of our foray into the curated channel business," said Chris McGurk, CEO of Cinedigm in a statement.  "Leveraging our library of independent digital rights – the  largest in the world – makes this a natural evolution for us and we expect to launch additional curated channels in the near future."

After activating membership on a computer, YouTube users will be able to watch  paid channels on their smartphone, tablet, TV and PC. YouTube is working to allow signup via connected devices other than the PC.
Since launching a third-party content channels platform 18 months ago, YouTube has spent about $200 million developing the concept, which heretofore has been ad-supported or free.

YouTube attracts about 1 billion viewers watching 6 billion hours of video a month, making it the perennial No. 1 online video destination, according to comScore.

“We’ll be rolling paid channels out more broadly in the coming weeks as a self-service feature for qualifying partners,” YouTube said in a statement. “We look forward to seeing how … creators move ahead with a new way to reach the fan communities that made their channels a hit.”


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