Cable Show: Digital Multi-Channel Nets Pivot Toward Originals

Los Angeles--The next steps in the evolution of digital multi-channel networks may take them away from YouTube and toward paid content, said Ashley Kaplan, head of content for Fullscreen.

“I think YouTube is a great marketing platform,” Kaplan said Tuesday at the Cable Show panel session "Born to Stream: The Economics and Ideals of Internet-Originated Television." “YouTube is a place where you can grow your audience, where it’s an engaged audience. I think if you’re looking at deficit financing premium content, it’s not a good place to spend your dollars.”

Kaplan was joined in the session — moderated by Comcast Ventures managing director Amy Banse — by StyleHaul founder, president and CEO Stephanie Horbaczewski and Tastemade Founder Joe Perez. Fullscreen, StyleHaul and Tastemade are all MCNs that began aggregating YouTube channels run by partner content creators but are now venturing into producing their own content.

Kaplan said that Fullscreen began as “a tech company creating products and scalable solutions for our creators,” but added that, as the company transitions into creating higher quality video programming it's "not going to program original content on YouTube. We will be evolving off of YouTube, and as that happens we will be creating for that platform.”

Horbaczewski said that for StyleHaul, YouTube remains the best platform for video. “There is no other platform right now that has anywhere near the audience or engagement,” she said. “This is the place to be for us.” She added that for StyleHaul, “the multi-platform conversation is across social platforms and not about moving video off of YouTube.”

One of the major challenges facing digital video producers is the sharp rise in mobile engagement. “We feel that YouTube is a massive platform for distribution of video, but we also feel that mobile is massive,” Perez said. “Most of our company is actually focused on mobile opportunities. But we don’t take the videos off of YouTube and put them on our own mobile properties and hide them away from YouTube. That’s just not smart. You have to be on YouTube.”

StyleHaul has ventured into long-form content, a step that Kaplan said Fullscreen will soon be making. But she insisted that YouTube’s economic model “just doesn’t allow for that.” Engagement was the watchword of the conversation, particularly when it came to younger viewers.

“Brands are seeing that they want to advertise to this younger audience and not all are of them are watching television,” Perez said.

And while all three execs were able to present stats illustrating how their engagement with younger audiences dwarfs that of many traditional media brands, they also admitted that challenges exist as well. One comes from the content creators, who drive those high levels of engagement with their native social-media skills and built-in marketing, and who are thus less easily influenced by networks.

“These creators have a lot more control with us than they do at traditional formats,” Horbaczewski said. “They have their own distribution platforms, they have their own success, they’re able to get their own viewership. They don’t need us to provide TV or a network.”

Another point of consensus was envy over cable’s dual revenue stream. According to Horbaczewski, YouTube has already alpha tested paid content, claiming the results were that “ninety percent of the revenue on that video came from people paying for it.” She added that YouTube has a beta version with more partners, including StyleHaul, planned for later this year. But, she said, "Paid, I don't know if [YouTube parent company] Google is where we want to do that. We'll see."

Kaplan was dubious of YouTube as a paid content platform.

“We love the cable model,” she said. “We think that we can evolve into something else. I don’t think it’s going to be on the YouTube platform.”