YouTube is now offering advertising-supported movies free of charge to users.
The service was started rolled out with little fanfare by YouTube with movies such as The Terminator and Rocky amongst the first titles on offer.
AdAge quotes Rohit Dhawan, director of product management at YouTube, as saying: “We saw this opportunity based on user demand, beyond just offering paid movies. Can we do ad-supported movies, free to the user? It also presents a nice opportunity for advertisers.”
YouTube has not unveiled how it is paying the studios for the movies, or whether there is some sort of revenue split, however Dhawan hinted that there could soon be a system where advertisers could sponsor specific movies.
Currently, the YouTube offering is at about 100 films although Dhawan said the number will be expanding.
Analysts at investment bank Exane/BNPP, in a note to clients Nov 26th, said: “This news is another hit for the traditional Free-to-Air broadcasters whose core business is to show quality entertainment in exchange of advertising. While the number of ad supported movies on YT is still quite small (i.e. Estimate at 100 movies) this is likely to change in the near future as it is in the platform’s interest to offer more premium content to guarantee advertisers that their ads are run next to appropriate content.