YouTube’s Á Là Carte and VOD Lessons

YouTube’s $300 million “Original Channels Initiative” has quietly faded away after barely two years.Yet its transmogrification into dozens of new channels offers pointers into the evolving world of micro-channel programming and á là carte availability.

The landing page for the highly touted, two-year-old Original Channels Initiative disappeared this month, as noted by TubeFilter, an independent site that tracks activities at Google’s video subsidiary.The Originals site had been a way for viewers to discover new content and for Google/YouTube to support the shows it was funding. 

Now the surviving programs and channels – both those that received second-round investments as well as shows funded in the second year – are moving to stand-alone status.From the start Google made clear that the project was an experiment and would evolve through different forms.As TubeFilter’s Sam Gutelle points out, YouTube learned that upstart creators were “far more likely to craft successful channels than traditional media stars.”Although that observation ignores several big-name-brand made-for-YouTube productions, it rightly acknowledges that original, alternative content can find audiences in the video-on-demand environment.

And that the programming can be monetized: so far by advertising, potentially by viewer fees. 

Google’s investment also found that viewers like channels loaded with content.The top 25 channels from the Originals project averaged more than 5.2 million views per week – a level that would be coveted by many cable specialty channels. (Admittedly, the YouTube “channels” are not full-time linear services, and thus avoid the overhead expenses required by such ventures.)

Many channels that were bundled into YouTube’s Original Channels Initiative have struck off on their own now that they have name/brand recognition.Some legacy shows plus new programs/channels are being created in YouTube production facilities in Los Angeles, London, Tokyo and New York.Think of them as studio space, akin to Hollywood’s classic soundstages and backlots but designed for the digital era.The facilities mean that Google money is still underwriting productions but without a direct handout.YouTube/Google still get the advertising income, though.

Most significantly, the popularity of the channels and short-form programming has enabled Google to get an even better understanding of viewers and their preferences and viewing patterns.By matching YouTube’s top-watched channels with data from last month’s Pew Research Center’s report on “The Rise of Online Videos,”important patterns emerge. The Pew report identifies the growing appeal of many popular categories that compete with cable programming and that also match content produced in the YouTube initiative.

For example, Pew found that 58% of online adults now watch comedy/humor shows (up from 31% in 2007). About 50% watch music performances online, compared to 22% six years ago; “how-to” and “educational” shows also magnified their viewership during the study period, while “news” videos (not a YouTube initiative funding recipient) showed only slight growth online.

The Google/YouTube decision to abandon the Originals channel resembles cable networks’ periodic reinvention, rebranding and overhaul.It affirms the fungible nature of digital video programming as well as the speed at which shows and channels can be created and marketed.

It’s also a reminder that VOD and á là carte can find quick audiences – a competitive reality in the digital video marketplace.That’s significant for cable operators and networks.

Gary Arlen

Contributor Gary Arlen is known for his insights into the convergence of media, telecom, content and technology. Gary was founder/editor/publisher of Interactivity Report, TeleServices Report and other influential newsletters; he was the longtime “curmudgeon” columnist for Multichannel News as well as a regular contributor to AdMap, Washington Technology and Telecommunications Reports. He writes regularly about trends and media/marketing for the Consumer Technology Association's i3 magazine plus several blogs. Gary has taught media-focused courses on the adjunct faculties at George Mason University and American University and has guest-lectured at MIT, Harvard, UCLA, University of Southern California and Northwestern University and at countless media, marketing and technology industry events. As President of Arlen Communications LLC, he has provided analyses about the development of applications and services for entertainment, marketing and e-commerce.