Analysis: YouTube's Originals, Seven Months After the Newfronts

Optimism, growing pains, public contract disputes: it must be the tech sector

Earlier this year, YouTube had its very first upfront event—dubbed a "brandcast" by the Google-run video portal—during which it laid out just what it was getting for its $100 million investment in funding for 100 "channels" of content consisting entirely of professionally-produced material.

The producers in question ranged from old hands at the YouTube model—Maker Studios, for example—and relative newcomers anxious to expand their presence in the digital space, like Electus, which had loads of digital properties and several television shows, but no YouTube native channels ( has a popular YouTube channel, but also its own popular Web destination).

Slowly, the results are coming in.

Adweek has learned from sources in the online video world that YouTube will be committing to between 30 and 40 of the channels for a second round of funding; the rest will be left to fend for themselves, though YouTube balks at the term "cancelled," since the channels will still be able to produce with their own resources and the YouTube-funded videos will remain live. Most of the channels are still under consideration, but at least two have come back with definitive answers: Deca's woman-focused channel, Kin Community, is out, and Electus's NuevOn (produced with Latin World Entertainment), which targets young Hispanics, is in.

Interestingly, at the executive level, even folks who aren't on the list for that second round of money are pleased with the experience overall.

"YouTube sales gets lots of calls from advertisers looking for women's programs," said Michael Wayne, CEO of Deca, which produces Kin Community. "We did a big, six-figure deal with them with Quaker, and we acted as a studio for the content and we brought our [people] to create video, so we've been on their radar for years, and we continue to work with the sales team. And they want that women's audience on the platform, and we couldn't be happier to build it, whether they fund it or not." The initial investment, said Wayne, gave Deca the ability to build the infrastructure for Kin, and because its audience isn't naturally endemic to YouTube yet, it took a while to grow—but it is growing.

There's been plenty of criticism of YouTube's flashy entrance into the premium ad market (not least from Time Warner CEO Jeff Bewkes, who called the $100 million programming investment "cute" at a recent panel discussion), but criticism of the company for failing to command TV-level CPMs may be missing the point. According to people who participated in the program, the sea change has been in the way native online video providers regard high-level production.

"YouTube had an offsite about two weeks ago and they were opening up their new studio in Playa Vista, and the energy of a technology company embracing entertainment the way they have is just like, 'Finally,'" said one entertainment vet who launched a channel with YouTube this year. Historically, said the producer, the problem has been that entertainment types who make the content and tech execs, who have the money, aren't able to agree on what defines quality. "In the past [at another tech company] it's been the engineers and the creatives not seeing eye-to-eye, and at the end of the day, the engineers go, 'Why do we need to go this way? UGC is the way of the future, not premium, quality content.'"

And while that's been good for producers, YouTube has benefited from increased viewership among people who weren't necessarily spending all day on the site. Sometimes that was for unexpected reasons—NuevOn scored huge views in the wake of the sudden and unexpected death of Hector "Macho" Camacho, whose Es… Macho Time! series on NuevOn was the boxer's final professional endeavor before his untimely death at age 50. It may sound a little ghoulish (not to mention sad), but the attention has allowed NuevOn to grow, and to bring a new audience to YouTube.

"We've been able to determine who the audience is for our channels," enthused Electus' COO and head of digital, Drew Buckley. "You'll specifically and directly see if it's something they like or don't like, because they have coments and buttons that say 'Like' and 'Don't Like.'" And that's helped Electus locate an underserved demographic. "We've tied into a growing youth U.S. female Hispanic market," Buckley said. "It's young women who love [...] NuevOn. People think YouTube is young male, and we've been able to find and grow this niche of young women from 12 to 34."

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