YouTube is getting closer to selling an ad-free subscription video service, but might have to go without major TV networks.
Google, YouTube's parent company, told Bloomberg that its current partner deals cover more than 90 percent of all YouTube viewing. However, sources told Bloomberg that TV networks such as Fox, NBC, and CBS haven't signed on.
There's still time for negotiations, Bloomberg reports. Still, Google doesn't have the same leverage with networks as it does with YouTube celebrities, who will be required to participate in the ad-supported service if they want to maintain YouTube Partner status.
Why this matters: The lack of TV networks isn't a huge surprise, given that YouTube has never been known as a source for full-length TV shows from the big networks. But as more people turn to smart TVs and set-top boxes for their evening entertainment, it's unclear whether homegrown YouTube stars such as PewDiePie and Smosh can shoulder the burden of a compelling subscription service. That may explain why YouTube has at least tried to get major media companies on board.
Making subscriptions worthwhile
To make subscription service more valuable, Google could bundle it with Music Key, a YouTube-based subscription music service that also includes music videos. YouTube announced Music Key last November, but has not yet released it to the public. Music could be a big draw as YouTube's most popular type of video, but streaming rights for music are expensive; services such as Spotify and Apple Music charge $10 per month for full on-demand access.
Beyond just getting rid of ads, Bloomberg claims that users will be able to store videos for offline viewing. Currently, offline YouTube viewing is only available in a few regions including India. YouTube may also add some kind of pop-out window for watching videos while using other apps, just as Twitch did recently for its Android app. It's unclear how this might work, however, given that Apple's iOS 9 and Samsung's Android devices allow windowed viewing at the system level.
There's no word on how much YouTube's subscription service might cost or when it'll be available, though Google is reportedly aiming to roll it out by year-end.