Video streaming giant YouTube is reportedly scaling back its original scripted content production plans. According to a report from the Hollywood Reporter, the Google-owned service plans to make all future original programming available to users for free with advertising. Parent company Alphabet Inc. is seeking a bigger audience for shows and movies released on the subscription service, YouTube Premium that had so far been restricted to paid subscribers. The move away from scripted shows could likely mean the end of the Premium service as a separate offering.
YouTube Premium launched three years ago, and is available in 29 countries at a price of about $12 a month in the United States. YouTube has not disclosed the total number of subscribers for the paid offering, but reports suggest that uptake for the subscription service has been slow is said to have prompted the shift in strategy. The online video giant will scale down the amount of scripted original programming it produces by 2020 and has been informing creative partners about the shift, per multiple sources said THR.
The shift in strategy means that in 2019, YouTube Premium subscribers can no longer expect exclusive access to original programs on the subscription offering. YouTube's paid option will continue to remove ads from originals as well as all other videos, and it has added a five-month-old music streaming service to the offering. The company said it will release previously announced shows and movies scheduled for YouTube Premium, which will remain behind the paywall, if only temporarily.
The Hollywood Reporter article source said YouTube is making "serious budget reductions" to its scripted content business behind which YouTube has allocated annual budgets in the hundreds of millions, still way below the billions spent by Netflix and Amazon. YouTube Originals hasn't produced any major hits, the biggest success so far being the Karate Kid spinoff series 'Cobra Kai', which had a well-received first season. But with two billion viewers worldwide, YouTube commands a huge audience for ad-supported content.
"If you look at our originals over the last few years, our main goal was to drive subscribers to YouTube Premium," YouTube chief business officer Robert Kyncl told The Hollywood Reporter. "But through experimentation, we've also learned that we can make a lot of the projects work incredibly well when we make them available free to users."
The move to make original content free is also aimed at addressing growing interest from international regions in original programming and advertiser demand from brands looking to sponsor premium content. Kyncl added that they have received advertiser interest about scripted shows that were previously ad-free.
Shifting focus to embrace the ad-supported model may help them increase the number of viewers for each original show or film. While YouTube is still considering strategies for ad-supported content, the rollout will vary from case to case. Possible scenarios suggested include releasing weekly episodes of original shows for free viewing, or giving Premium subscribers the option to binge watch shows.