60-70% Of YouTube’s Funded Channels Won’t See 2nd Round Of Funding

By Megan O'Neill 

Out with the old, in with the new!  Back in August, word got out that YouTube would be cutting funding to some of the less successful new channels that they had invested in as part of their original channels initiative.  It looks like the time has come to weed out the channels that aren’t performing as well.  Over the next few weeks, 30 − 40 percent of the original channels will be notified of continued funding, while the rest will, as Michael Learmonth of Ad Age puts it, “quietly go away.”

The first round of funding, for YouTube, was something of an experiment.  The online video giant put money into a variety of different channels, giving already-successful YouTube partners like The Fine Brothers and MysteryGuitarMan and Philip Defranco money to start their own channels; funded television networks and print publications to produce more content online; and invested in popular musicians, athletes and other celebrities, among them Jay-Z, Tony Hawk and Madonna.  Nearing the end of the first year of this initiative, the site has a much better idea of what works and what doesn’t.

Learmonth writes, “What didn’t work?  A celebrity name attached wasn’t enough.  Nor was simply creating content—however good it might be—and posting it to a channel.  While channels failed for a lot of reasons, the ones that are succeeding have one common characteristic: they make building the audience as big a priority as creating content.”

Courtney Hold, COO of Maker Studios, told Ad Age,”Celebrity alone isn’t enough to drive it.  You need to have a commitment to the platform, to understand how to build your audience.”  For this reason, many of the most successful channels are those that are run by individuals and brands that were already big on YouTube.  Among the top 25 are Machinima, Sourcefed, Mondo Media, Geek and Sundry, The Onion and other brands, which already had years of experience under their belts building an audience on YouTube and the web.

What happens to the channels that are getting cut?  Well, they aren’t getting kicked off YouTube, but it will be up to them to decide whether or not they want to keep producing content.  It should be noted that the original investments that YouTube made in these channels were to be recouped by the video site, in the form of ad revenue, and Peter Kafka of AllThingsD reports that “In the cases where youTube hasn’t recouped its initial programming outlay, the site will continue to collect 100 percent of any revenue generated by the videos it paid for.”

Do you have any predictions about which YouTube original channels will be kept on and which will be given the boot?  Please share your thoughts with us in the comments below.

Megan O’Neill is the resident web video expert here at Social Times.  Megan covers everything from the latest viral videos to online video news and tips, and has a passion for bizarre, original and revolutionary content and ideas.