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YouTube Kills Paid Channels, Expands $4.99 per Month Sponsorship Model

YouTube is getting rid of one of its first paid content models: The Google-owned video site announced Tuesday that it is discontinuing its paid channels initiative, effectively killing the option to sell the content of individual channels to paying subscribers. Instead, YouTube is expanding its sponsorship model, making it available to all YouTube Gaming creators and testing it with some creators within the main YouTube app.

YouTube first introduced paid channels in 2013 as its very first move into the subscription business. Initially launched with a few dozen content partners including the Sesame Workshop, NatGeo Kids and DHX Media, paid channels allowed creators to set their own price for subscriber-only channels on the service.

However, there were signs early on that YouTube’s audience didn’t care much for these paid channels, and the initiative has since been overshadowed by YouTube’s other monetization options, including the site-wide YouTube Red subscription service. At the last count, less than 1% of creators were making use of paid channels, according to YouTube.

One of the ways YouTube is now looking to replace paid channels is a patronage model. YouTube began testing sponsorships with select YouTube Gaming creators in late 2015, and is now making this additional revenue stream available to all of YouTube Gaming. Users can sponsor a creator for $4.99 a month, and in return get custom chat badges and custom emoji as well as access to a sponsor-only chat. Creators can even give them additional perks through third-party integrations.

YouTube product manager Barbara Macdonald said in a blog post Tuesday that sponsorships have been a huge boon for some of the creators who were part of the test phase: “Rocket Beans earned 1,500 sponsors in their first day. And ONE_shot_GURL’s monthly celebratory wall of sponsors is getting so full, it’s running out of room.”

If all goes well, these kinds of sponsorships may one day also be available to all of YouTube’s creators. The video service is starting to test it with a small group of creators within the main YouTube app now, also offering them the chance to sell sponsorships for $4.99 a month.

In addition to these monthly sponsorships, YouTube will also continue to offer creators the ability to sell so-called Super Chats. These are essentially paid messages in a live chat, similar to virtual gifts users can buy on Twitch, YouNow or Musical.ly. Compared to that, sponsorships are more closely comparable to the patronage model established by Patreon, which coincidentally announced a new $60 million round of funding Tuesday.

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