YouTube launches ad-free pay subscription plan Red

24 Oct 2015 | Author: | No comments yet »

ESPN pulling videos from YouTube due to rights issues.

ESPN has begun removing its videos from YouTube due to rights issues surrounding next week’s launch of YouTube’s ad-free subscription service, Red.YouTube announced earlier this week that it is launching a subscription service known as YouTube Red that it hopes will make the lives of content companies better by increasing the revenue they generate, but at least one large media entity isn’t going to be on board for the ride. ESPN’s video channels on YouTube have all gone dark and its clips are all being removed, as a result of what a YouTube spokesman called “rights and legal issues.” At least for now, it seems, ESPN and YouTube have decided to go their separate ways. For Google GOOG 7.70% , there’s a lot riding on the launch of the new service, which provides access to all of YouTube’s content without advertising, as well as other features like offline viewing, for $9.99 a month.

Media analyst Laura Martin of Needham & Co. said it is likely that ESPN’s pre-existing contracts with cable and satellite companies like Comcast Corp. prevent it from participating in YouTube’s subscription plan. So in order to make the offer as appealing as possible, the company has been trying for what it calls “content parity,” meaning whatever is available on the free site with advertising needs to also be available on YouTube Red without advertising. If you’re a partner like ESPN GOOG 7.70% , what that means in practice is that if you either aren’t prepared or aren’t able to offer your content for viewing through YouTube Red, then it becomes unavailable through the regular YouTube site as well (although only to viewers in the U.S., since that’s where YouTube Red is being offered first). Comcast’s can’t be renegotiated before expiring around eight years from now, Martin said. ”I think YouTube will have to cave if they want ESPN back.” On ESPN’s main YouTube channel, the most recent videos are now 4 years old, but some specific channels like ESPN First Take have videos that are new as of Friday. There’s been a lot of grumbling from media companies about how this amounts to a form of extortion or strong-arming by Google, with their content held hostage unless they agree to this new deal.

YouTube began sending out new contracts to its creators six months ago to sign new terms that would allow them to participate in new revenue from Red subscriptions. A spokesman from ESPN wasn’t able to comment on the specifics, but the problem could be a conflict between YouTube Red and the rights that the sports network holds to game-related content.

To take just one example, in some cases ESPN may have the right to broadcast a game, but not the right to make a recorded version for offline viewing—which happens to be one of the features that YouTube Red offers. Sports content is among the hardest to co-ordinate from a licensing point of view because there are so many different competing agendas, whether it’s the leagues or the players’ association or some other agency, all of whom are interested in the massive licensing revenues that sports content generates.

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