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cable or satellite provider the subscription fee that users pay monthly (Gurley, 2010). The cable providers had almost monopoly pricing power, that’s why those fees could be substantial, about $45 for each subscriber (Forbes, 2016). To better understand this issue, I will show some examples. “According to Matthew Harrigan at Wunderlich Securites, in 2009 DirecTV paid approximately $37/sub out of an ARPU of $85/sub to content owners for programming costs (i.e. affiliate fees)” (Gurley, 2010). So, affiliate fees represent 43% of total income for DirecTV. And total year revenue of the company represents approximatively $7-8 billion. Moreover, the cover story of Business Week supposes that total fees of all content providers can be $32B per year. To make this clearer, this number is 33% more than total annual revenues that Google makes from advertising (Gurley, 2010). Obviously, despite popularity and number of users worldwide, YouTube does not have such an income, as TV channels have, at least not yet. The difficulty of describing YouTube’s business model is in the fact that the company does not reveal much about it. They declare, as I have mentioned before, that the main source of the website’s revenue are advertisements. As all free social medias nowadays, YouTube makes money from monetizing videos uploaded by users, by selling advertisers the possibility to place their commercials against videos. The price that advertisers want to pay for ads depends on the number of viewers and quality of content. The next source is subscription fee for the new services - YouTube Red and YouTube TV. I have already touched YouTube TV in the first capitol. This is the new subscription service of YouTube that attempts to invade the world of online TV. Obviously, meanwhile YouTube TV is not ideal, because many channels are missing in the lineup of the service. But whereas this service exists less than a year, meanwhile it is not so important. The most important thing is, that the company has done a significant step in the evolution of the media space, they have done something that nobody has done before – combined in one service live TV and on- demand content together (Dunn, 2017). YouTube TV represents this inevitable transformation of traditional TV, replacing the role of cable providers, YouTube now is the one, who buys rights to broadcast content of channels and shares a subscription fee with them. As known, YouTube has made deals with many famous channels. 36PDF Image | Youtube a new era of TV
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