CBS, NBC Said Close to Joining YouTube's Pay-Video Service

  • Earlier reluctance fades amid desire to reach young viewers
  • Late-night hosts are particular favorite of online audiences

CBS Corp. and Comcast Corp.’s NBCUniversal are close to joining the new paid-video service that’s set to be unveiled by YouTube this month, according to three people with knowledge of the discussions.

Their willingness to participate in the advertising-free version of YouTube marks a reversal of sorts and reflects the Google Inc.-owned site’s importance in reaching younger viewers. The major record labels and several of YouTube’s other partners have already joined. Time Warner Inc.’s Turner Broadcasting division, which operates CNN and TBS, said Friday it will take part, as did A+E Networks.

“We are progressing according to plan to provide fans more options in how they enjoy content on YouTube,” YouTube said in an e-mail. “We have support from the overwhelming majority of our partners, with over 98 percent of content watched on YouTube covered by agreements, and more in the pipeline about to close.”

With the success of Netflix and recent declines in conventional pay-TV subscriptions, media companies are reassessing their reluctance to provide content online. As recently as July, some major companies had balked at participating in the paid YouTube service, because they viewed the company as a marketing platform for their shows, rather than a source of revenue, and were also unsure what video rights they could license to the online site given existing deals with other pay services.

This week, NBC announced it was starting an online comedy service called Seeso for $3.99 a month. CBS and Time Warner’s HBO also have paid offerings.

YouTube plans to start its service by the end of October and charge $10 a month, Re/code reported in September. The company will introduce two new features to convince people to pay for the commercial-free service. Subscribers will be able to store videos and watch offline, and while using other applications on a mobile phone or tablet, people with knowledge of the matter said in April.

Executives from the media companies and YouTube have been ironing out the details of what the companies will and won’t supply to the site, according to the people, who asked not to be identified because the discussions are private. The company has advised partners that their clips won’t be allowed to remain on the public, ad-supported YouTube if they don’t participate in the paid commercial-free version. Holdouts can keep videos hosted privately on YouTube, allowing them to become public once a deal is reached.

Late-night hosts, including Jimmy Fallon and Jimmy Kimmel, are popular on YouTube. CBS is selling advertisements for videos featuring its new late-night host, Stephen Colbert. Still, videos from major media companies account for a small fraction of the overall viewership on YouTube, whose most popular clips include user-generated videos, gaming videos and music.

YouTube’s new service is of particular significance to record labels, which have been pushing Internet companies like Spotify and YouTube to limit what they provide for free and encourage more people to sign up for paid subscriptions.

The Wall Street Journal reported on Turner and A+E’s deals earlier Friday.

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