YouTube is in talks with content providers to add a pay-per view element to its business, which would allow partners to charge end users to view some premium content on the online video site, according to MediaMemo‘s “multiple sources.”
The talks center around YouTube creating a new micro-payment model for streaming videos that would rival similar offerings from Apple’s iTunes and Amazon’s video-on-demand service. According to the report, YouTube would offer first-run shows a day after airing on broadcast and cable networks for about $1.99 each.
The news comes not long after earlier reports that YouTube was in talks with major film studios to introduce a movie rental service. In that report, YouTube was expected to charge about $3.99 for movie streams, putting it in general parity with movie rentals from iTunes and Amazon.
The key stumbling block seems to be whether consumers would pay for video streams at the same price that they pay for downloads from iTunes. But networks and studios don’t want to charge less for streaming service, fearing they might then have to renegotiate existing deals.
While Youtube already has some full-length programming from premium content partners, most notably CBS, most of that content is older, long-tail videos from shows long gone by, like Start Trek: The Original Series or Beverly Hills: 90210. But if it were able to launch a micropayments system, it could potentially open up a new realm of premium videos available to users.
YouTube isn’t the only ad-supported video site pondering a pay model; Hulu has long been rumored to be interested launching a subscription service that would add to its revenue stream, for instance. In both cases, the pay models aren’t meant to supplant the ad model, but to add additional revenue for value-added services on top of the existing business model.