YouTube puts up $100M for original content as it chases channel strategy

Google's (Nasdaq: GOOG) YouTube long has been rumored to want to mold itself into more of an Internet-based cable company. Those rumors picked up a lot of weight today with a Wall Street Journal report quoting "sources" that said the video site is ponying up $100 million to roll out a slew of free channels with professional-quality video.

Backers are reported to include pro-skateboarder Tony Hawk, Warner Bros., ShineReveille (Ugly Betty), FremantleMedia (The X Factor), SyFy content source BermanBraun, and Mob Wives producer Electus.

Other content partners might include Everyday Health, former Sundance Channel chief Larry Aidem and former VH1 executive Michael Hirschorn's Iconic Entertainment, CSI creator Anthony Zuiker, women's-content creator DECA and The Wall Street Journal, which recently increased its financial news programming slate.

YouTube, which comScore said had more than 600 million visitors last month, believes that its bargain ad rates--they're lower than sites like Hulu, for example--and targeted advertising format are ideal for such a venture. The property, which Google bought for $1.6 billion in 2006, is expected to see net revenue of $1 billion this year, double its net revenue a year ago. It also is offering advertisers opportunities to sponsor programming directly, and may alow content partners to sell ads as well.

David Cohen, an executive vice president at Universal McCann, a media-buying agency, told The Journal that the site's new strategy "is a clear signal of its commitment to creating immersive and engaging original content." And, despite the disparity in ad rates between Hulu and YouTube, "there is nothing preventing YouTube from getting Hulu-type ad rates assuming the final content is as engaging as we anticipate."

For more:
- see this WSJ article

Related articles:
YouTube jumps into round-the-clock video streaming of live programming with two-day test run
Ooyala gives publishers new tool to measure YouTube video play
For YouTube, best bet to finally make a profit rests with ex-Netflix exec
YouTube at 6 is starting to mature, assess its goals
YouTube expands movies offerings with support from 3 major Hollywood studios

Suggested Articles

Comcast/NBCUniversal is reportedly shifting around its management team ahead of the company’s high-profile launch of Peacock.

In recent years, a number of factors have shifted the video services landscape, including the introduction and explosive growth of OTT services.

Streaming TV services like AT&T TV Now (formerly DirecTV Now) could soon be considered “effective competition” for cable operators like Charter.