- Associated Press - Monday, November 12, 2012

NEW YORK — When Google announced its plans to fund about 100 new channels of original programming on YouTube, many expected a transformation in television.

Google had disrupted other industries, and TV appeared to be next in line: Just as a handful of networks begat a few hundred cable channels; YouTube would foster the birth of thousands of channels online.

Though a year later such a cultural sea change isn’t palpable, YouTube is doubling down on its investment. It recently expanded into Europe with another 50-plus channels. And now, YouTube is reinvesting in 40 percent of the channels that already have launched. That means more than half of the channels have failed to catch on, yet it’s still a rate of success any network programmer would kill for.

But for YouTube, success at this stage is measured less by view counts than by changing perception.

“What we’re trying to do is galvanize the creative and advertising community,” said Robert Kyncl, YouTube’s global head of content and the leader of its channels initiative. “And we’re succeeding at that.”

A frame grab of Amy Poehler in "Smart Girls". (Youtube)
A frame grab of Amy Poehler in “Smart Girls”. (Youtube) more >

Since it was founded in 2005, YouTube has been predominately the home of user-created video. But by putting out a welcome mat to Hollywood, the site is trying to lure viewers to stay longer and to coax advertisers to pair their brands with known talent.

Mr. Kyncl says the first year has been one of defining where YouTube’s channels fit into the media landscape.

“I feel we’re 300 percent smarter than we were in January,” he says.

YouTube has declined to make public the size of its investment. The initial channel launch reportedly was fueled by $100 million, a number YouTube executives dispute. Mr. Kyncl will go no further than to confirm the $200 million he pledged to spend marketing the channels at YouTube’s TV-style upfront presentation to advertisers in May — a flashy event capped by a performance by Jay-Z, who recently launched a lifestyle channel called Life and Times.

Jamie Byrne, director of content strategy, said the second round of funding would be relatively similar to the amount of the first round, on a per-channel basis. Those not being offered more money aren’t canceled; they are encouraged to keep going but will have to pay their own way.

A simple glance at the site reveals how central the channels’ initiative is to YouTube. The fabric of the video behemoth — where 72 hours of video are uploaded every minute — has been reoriented to emphasize a user’s playlist of channels, a move that has increased channel subscribers by 50 percent, executives say. It may sound like a small tweak, but behind it is the mission to alter the very nature of YouTube.

“Up until now, the primary noun on YouTube has been video. You watch a video, you share a video, a video has view counts and so on,” said Shishir Mehrotra, director of product management at YouTube. “We’re gradually shifting the site so the primary noun on the site is the channel, and you tune into the channels that you care about.”

Sometimes lost in the fanfare over YouTube’s channels initiative is that it’s only a drop in the bucket for all of YouTube’s channels. Through ad revenue-sharing, more than 1 million content creators are earning money through YouTube, from pennies to hundreds of thousands of dollars.

The channels that have received funding from YouTube aren’t separated from the tens of millions created sans financial backing by users, upstart production outfits and large media companies. Those funded by YouTube are just seedlings in endless pastures of video, planted with the hope of sprouting more.

The first harvest, though, has not impressed some onlookers. Forrester analyst James McQuivey, who specializes in digital video and was among those who predicted YouTube’s channels would be a landmark shift, has not seen the progress he expected. He would like to see YouTube try to produce some mainstream originals, as Netflix and Hulu have, in order to attract mass audiences, not just niche ones.

Story Continues →