YouTube more cautious with content than competitors
YouTube is spending less on content than its rivals – powerful streaming video on demand (SVOD) platforms like Netflix and Amazon Video. That doesn’t mean the company isn’t spending at all – in fact, it’s spending heavily, as anonymous sources say that this year’s budget will be in the “few hundred million dollars” area – it’s just not planning to up it. Whereas Netflix and Amazon have both made commitments to increase content spend year-on-year, YouTube is planning to keep its budget flat until further notice.
Alphabet’s share price is up by 8% so far this year
SOURCE: Yahoo Finance
Like all players in the SVOD game, YouTube is massively interested in content. The only question is how its interest measures up against its peers. Speaking to the press about the announcement on Friday, YouTube’s chief business officer, Robert Kyncl, made the following statement:
“YouTube Originals are a driving force for YouTube Red, and we have a full slate of Originals already planned for 2018 and 2019. While we don’t comment on speculation regarding our budgets, you’ll see us continue to invest heavily in original programming as we ramp up our overall efforts to promote YouTube Red over the next year.”
This year, YouTube Red plans to follow up 1984 cult classic The Karate Kid
While YouTube has yet to commission the kind of blockbuster hit that Netflix (Stranger Things, House of Cards, Orange is the New Black) or Amazon (American Gods, Transparent) have, there is some buzz online over its content. Perhaps surprisingly, one of the most anticipated releases is a tongue-in-cheek sequel to 1984’s martial arts coming of age drama, the Karate Kid. Uniting the original cast, a series will explore what happened to the film’s protagonist and antagonist, who remain in the same town and appear to nurture the same rivalry that drove the original film’s storyline.
Like most of YouTube’s successful content, its Karate Kid sequel is a left-field idea. That’s worked well for the company in the past, having featured entertainers like Amy Poehler and 50 Cent before they were household names. Can it continue to work in a newer, more competitive landscape? Time will tell.
Dominion holds Alphabet, the parent company of YouTube, in its Global Trends Ecommerce Fund.
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