YouTube takes on TV networks, SVOD providers
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YouTube takes on TV networks, SVOD providers

Over the next year, YouTube will fund more than 40 original shows and movies in an effort to capture viewership from rivals at major TV networks, as well as streaming video on demand (SVOD) services like Netflix and Amazon Video. This is a big turnaround for YouTube.

Previously, the massively popular video hosting site has been all about making a platform for amateur movie-makers to upload free-to-watch videos on everything from their thoughts about local politics, to makeup tutorials, to video game footage. The reason for the switch? As more of the big budgets that were once reserved for television advertising migrate online to feature on premium content like Orange is the New Black (Netflix), and Preacher (Amazon Video), YouTube – the king of online video advertising – wants in.

Susanne Daniels, YouTube’s head of original content, told an interviewer what to expect: “We’re working with YouTube stars and big celebrities that we know have global appeal, advertiser appeal and are largely established on the platform.” Some of those celebrities include Ellen DeGeneres, one of TV’s most popular talk show hosts, and Kevin Hart, a respected stand up comedian and Hollywood leading man.

This won’t affect YouTube Red – the company’s premium, ad-free, subscription service. That service, according to an anonymous source, is slated to receive a number of programs that cost “$3 million to $6 million per hour” – a comparable budget to HBO and Showtime’s programming.

One of the reasons that the competition should worry about YouTube’s ability to capture viewers is the deep pockets of parent company Google. For the first quarter of 2017, Google reported ad sales of $21 billion – that’s more than the entire U.S. TV industry. In the words of YouTube’s chief business officer, Robert Kyncl:

“We’re turning the infrastructure we’ve built for original programming into supporting our biggest partners. Nobody is doing it the way we are. Nobody can release originals on a global basis with the scale we have in advertising.”

Disclosure

Dominion holds Alphabet, the parent company of Google, in its Global Trends Ecommerce Fund.


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