Pursuing a strategy that makes the video site more like a
digital TV, Youtube has helped fund about 180 independent channels over the
last year. Furthering the comparison to TV, Youtube has just announced that it
won’t renew approximately 60% of their programming because of budget demands.
Channels that don’t get renewed won’t be banished from the site, but will be
required to foot their own bill and pay Youtube any of its initial investment
that it has not yet recouped (Youtube provided up to $5 million in advances to
each individual channel last year). Channels will be cut according to viewer
engagement (total watch time) and cost to produce the show. This underscores
that Youtube is looking to monetize its video or channel library and perhaps a
smaller fleet of channels is easier to shop around to advertisers and as work
to establish advertising on these channels that makes sense for the long-term.
You-tube of course showcases its own original content and is therefore a
different business line than the likes of Hulu, but its similar digital
parallel of television is perhaps another reason for TV execs to be concerned
for long-term profitability in an increasingly digital world.
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