Google's (Nasdaq: GOOG) YouTube online video service is either growing up or becoming more mainstream--or both. It's certainly looking more like a traditional broadcaster that's interested in advertising dollars and quality viewership.
The online video player is, according to sources, looking to trim the worst performing of its original content channels. The pruning is part of the survival of the strongest of the batch of professionally produced channels the company funded to the tune of $100 million last February.
"They'll cull the herd and work with the best," a source told the New York Post. Those who don't make the cut won't make it to the new year, the source added. Those who do will be part of a new round of funding estimated at $200 million, for new channel start-ups.
"By October or November they're going to be deciding on new channels to fund," a channel partner told the Post.
Since February, YouTube has started to look more closely at how much time viewers spend on a channel as opposed to how many hits the channel gets--a big change in the way online video numbers are usually compiled. It's also in the process of trying to upgrade the quality of its videos to boost numbers that are already up from 3 billion to 4 billion hours watched since January.
Again, sounding like a mature broadcaster with a need to satisfy advertisers, Google has to balance the number of viewers with the amount of time they're viewing.
"If a channel has 20 million views, and viewers spend just 35 seconds on the channel, how valuable is that to an advertiser?" another anonymous source said in the story.
Those advertisers include a list of big spenders that include American Express, GM, Unilever, Gillette, Toyota and Hasbro, which Citigroup analyst Mark Mahaney thinks will spend $3.6 billion this year.
Among those channels unlikely to feel the axe are Warner Music-produced The Warner Sound and lifestyle and travel-focused Reserve Channel, both of which lead the service in popularity.
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