eBrandz Blog

Will new mix of content add to YouTube revenue?

For YouTube, the clicks’ game and popularity stakes are based on audiences’ willingness to subscribe to the channels in large enough numbers to prompt advertisers to shell out higher rates. Google, alongside Yahoo, AOL, Hulu and Microsoft is all set to showcase these channels to top advertisers in New York at the Digital Content NewFronts in May.

The YouTube channels are dedicated to a wide range of topics such as news, music, fashion and gaming. They are part of an intensifying battle among the world’s leading Internet platforms to grab more of television’s ad dollars by producing original content. A research by media research firm eMarketer estimates the spending for online video to go up by 55% this year, or more than $3 billion. But that amount is still only a fraction of the whopping $60 billion spent on TV.

Though the plan for the new channels was publicly announced a few month ago, many of the proposed outlets are only taking off now, with music-related ones among the first, including MyIsh; the Warner Sound; Bonnaroo365 & the Bowery Presents for live concert streams; Pitchfork.tv and Noisey for alternative music, among others. They will be partly promoted by YouTube through placement on its home page.

Google has been helping the partners and guiding them assiduously on the finer aspects of online self-promotion, with steps like the usage of annotations and search-engine optimization, and the links and text, which pop up as a video plays. Defining the core of the move, YouTube’s global head (content) Robert Kyncl, has been quoted as saying that we wish to make it easier and easier for viewers to get the content they love, something which is challenging especially when you’ve a lot of it pouring in every second.”

And then the content is obviously in the partners’ hands, which for some of them means a touch of cultural adjustment. Partners like IconicTV are trying to play by YouTube rules. For those like MyIsh, the production budget comes wholly from Google. Its investment in the channels is construed as an advance against ad revenues. Vice, the entity behind Noisey is looking at its deal with Google as a way of going for rapid timeliness, grabbing a potentially huge target audience – through volume and quick turnaround. Some are banking on higher production values.

The ultimate payoff for these channels is yet not clear. YouTube will enjoy exclusive rights to the hosted videos for a year at least. It has not specified so far whether the company will continue to prop up the channels after the rights period is over. A popular channel might fetch enough advertising revenue to well justify continuing with the production. And Google’s standard agreements offer content owners a larger share of ad revenue.