YouTube CEO Salar Kamangar, speaking at the D:Dive Into Media conference sponsored by tech news website AllThingsD this week, said the company may offer a subscription based video service on YouTube.
Kamangar said YouTube has until now focused its efforts on generating revenue through advertizing and to a lesser extent, video on demand sales, but is now turning its attention to a new subscription service that has great potential for monetization, with the website enjoying 800 million active users, and consistent growth in the number of videos watched every day.
Last month YouTube reported that the number of videos viewed every day surged from 3 billion in May to 4 billion, impressive figures given the website enjoyed just 100 million daily video views in 2006. The daily view numbers are important because they show YouTube is getting stickier – at the same time the active user base is increasing, users are also become more engaged on the site, staying on longer when they do get on.
Kamangar also spoke in general about the video marketplace, noting it is likely that the percentage of ad spending will increase compared to other business models. Currently, 40 percent of video revenues come from advertizing, 40 percent comes from subscriptions, and another 20 percent from online and offline sales or rental.
Kamangar stressed that YouTube currently has no definite plans about what subscription offering it may introduce, but is considering a subscription service that content partners could use. He said one example would be someone interested in Yoga could sign up for Yoga channels.
Kamangar, born in Iran in 1977, and the 9th employee to join Google after graduating from Stanford University in 1998, explained: “It’s possible now on YouTube because of the lower cost of production and because of the global size of the audience to build niches the way you couldn’t have done with cable.”
Kamangar’s comments provide indications about the direction YouTube will take given the website recently underwent a major redesign displaying channels on the home page that help surface video content users are interested in. Also, the company several months ago announced it is spending $100 million in order to create original content for its website.