In an effort to expand its content while also attracting blue chip advertisers to its website, Google Inc.’s YouTube invested $150 million into nearly 100 new channels approximately eight months ago. The gamble, if one can call it that, has born enough fruit that Google has decided to place a further $200 million into the project.
The new funding will go towards marketing the new channels, which feature high quality content rather than the user generated material that has made the site one of the most well-known around the world. That is not to say that user content will not be a major factor in the site’s future, but rather that the company is looking to expand their product offering and as a result their advertising revenues.
Thus far, several of the channels have been a success, attracting A-list talent such as Amy Poehler of Saturday Night Live fame, who are creating and starring in their own original programming. Not only do the channels grant their talent creative liberty rarely found in mainstream television and media, it also provides an incredibly low cost model for content.
For example, according to a recent Wall Street Journal article on the matter, the instant feedback that channels and videos receive allow content creators to literally edit and modify their work according to what their target audiences want. This has allowed several channels, such as comedic pop music forum MyISH to thrive, earning 700,000 unique visitors within weeks.
Thus far, the channels have been a success, with ten of them averaging more than one million video views per week. YouTube plans to extend the initiative into Europe, beginning with England and France next year.
The funded channels allow “brand safe” advertising opportunities for advertising that has to date not been available on the popular website. Advertisers have been keen to pay premium prices to advertise on channels that produce clean and high-quality content rather than pay what they have been paying thus far to be placed near random videos that they may not want associated with their brand’s image. According to an individual with direct knowledge of sales, $150 million has been put forth by advertising exclusively on the new channels this year.
The ultimate result of the channel experiment is that the high quality content and user friendly model attract more creative professionals to start their own channels thereby providing more variety to YouTube’s massive user base.
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