Media conglomerates including 21st Century Fox, NBCUniversal, A+E Networks and Turner Networks have reluctantly agreed to supply programming to a new $10-a-month subscription service being launched by YouTube.
According to the Wall Street Journal, the video platform will soon launch the premium service, which will include an ad-free programming bundle.
The Walt Disney Company, home to channels including ESPN, remains in negotiations with YouTube, the paper said.
Under terms of the agreements, programmers will collectively receive 55 percent of all subscription revenue that's generated. Each contributor's cut will be determined by the amount of time users spend watching their programming. This deal structure is reportedly not popular with the major programming brands, who agreed to it anyway.
"I'd rather not have anything to do with it," an unnamed media executive told WSJ. The executive added, nowever, that the marketing and advertising benefits from having content on YouTube "slightly outweigh the negative."
"We are progressing according to plan to provide fans more options in how they enjoy content on YouTube," the Google-owned (NASDAQ: GOOG) company said in a statement. "We have support from the overwhelming majority of our partners, with over 98 percent of content watched on YouTube covered by agreements, and more in the pipeline about to close."
The addition of a subscription model marks a major turning point for YouTube, which, despite massive audiences for its ad-supported video, has not produced huge profits for Google. (Note: Google doesn't break out YouTube's financials in its quarterly reporting.)
Despite uncertainty about the long-term future of the global advertising market, YouTube's audience is still growing. According comScore, Google sites attracted over 168 million unique users in August, up from nearly 160 million during August 2014.
- read this Wall Street Journal story
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