Online media YouTube takes on TV YouTube’s investment in original content shows it’s in a big hurry to become the new Channel 6, says Kate Bulkley

10 November 2012 | www.rts.org.uk | Television

hen Austrian extreme doch and Simon Cowell have become You- company, ITN Productions, Bigballs Films and sportsman Felix Baum- Tube cheerleaders. “There’ll be a point in the All3Media. gartner plummeted not-too-distant future where we’ll be able to Significantly, the funds are offered as upfront from the edge of space watch TV and YouTube will be Channel 6,” payments, with the platform recouping its towards Earth last month Cowell predicted. entire investment from advertising sales on on YouTube, his stunt At least 800 million people watch 4 billion the channels once they are up and running. Wpropelled the reputation of the online hours of YouTube video every month – a third “We like to make content and we like to video platform as a plausible alterna- higher than a year earlier. And it’s not all being get paid,” says Claire Tavernier, head of FMX, tive to television in the opposite watched on PCs, either: 1 billion views of You- the digital arm of FremantleMedia, which has direction. Tube content a day are on mobile devices. four YouTube-funded channels. “The idea Across the globe, there According to data from OpenSlate, the top of learning on someone else’s dime how to were more than 8 mil- two ranking categories of YouTube channels make content on YouTube is a great opportu- lion concurrent are music and gaming. Together, they repre- nity. Why should we not take the money?” live streams of sent 45% of the 1,000 most-viewed channels Channel ideas have to include not only the dare- on the platform. They are followed by comedy compelling content in attractive “verticals”, devil in (14%), entertainment (13%) and how-to and such as entertainment or lifestyle program- action style (7%). ming, but YouTube has also insisted on – You- Production companies and big studios such coherent plans for how to attract and build Tube’s as Disney have shown interest in producing audiences. The objective, according to You- largest- original content for the platform, but not fast Tube’s global head of content, Robert Kyncl, ever live enough for YouTube. is to make YouTube channels better able to audience. So, about 18 months ago the online opera- compete with traditional TV channels. Those strato- tor began a reported $100m investment initia- He told an audience of professional TV spheric numbers tive to fund more professionally made content. producers and broadcasters at Mipcom that have confirmed the “We wanted to pump-prime and jumpstart YouTube is well on its way: “In the US we are idea that YouTube is a the original content on YouTube because it making as much revenue per hour as ads on major factor in the wasn’t happening as quickly or in as diverse cable TV. That is great, great velocity.” future of televi- a range of areas that we wanted,” says Ben Hat Trick has won funding to launch an sion. McOwen Wilson, the former director of online original comedy channel in 2013 called Bad For the online for ITV who joined YouTube as director of Teeth, in partnership with Base 79, a lead- cognoscenti, You- EMEA in late 2010. ing UK digital rights management company, Tube has been a must- At the Mipcom TV programming market which will help Hat Trick manage and pro- watch destination for last month YouTube brought the plan to mote the new channel across YouTube. some time. Most UK broad- Europe, promising cash (up to $2m per chan- The plan for Bad Teeth is to mix online tal- casters already have catch-up nel) for 60 new ideas from companies based ent such as Cassetteboy (his Cassetteboy vs TV and archive channels on in the UK, Germany and France. the Bloody Apprentice video has racked up 4.5 YouTube. And many sports clubs Those already signed up to supply content million views on YouTube) mixed with more and leagues now put their clips on include Hat Trick, Endemol, Zodiak Media established TV talent. Hat Trick expects to YouTube within hours of the matches. and FremantleMedia’s German unit UFA Film, add two three-minute videos a week to its Contrary to what some people still think, plus BBC Worldwide, Jamie Oliver’s Fresh One channel, supplementing that with recordings YouTube isn’t only about videos of cats doing of live stand-up. tricks on skateboards. “With YouTube there is access to non-linear Granted, there is still a lot of that, and that is information about who is watching that is one of the platform’s appeals, but there is also Richard Broughton very interesting, especially when you com- a growing amount of first-class content, and pare it with the clunky system of TV ratings,” Gordon Jamieson Gordon not all of it for kids. YouTube has operas and IHS Screen Digest says Jonathan Davenport, head of digital at original animated series as well as the back Hat Trick Productions. “You can take bigger catalogue of the hugely popular TED talks. Five years ago YouTube was risks because you will know straight away if Meanwhile, YouTube spin-off channels it’s not working, and you can change it.” for signature TV shows such as the UK’s The not a direct competitor YouTube wants to accelerate the move X Factor and Britain’s Got Talent are hugely beyond majoring on funny home videos of popular: the two channels together have sur- to TV, but now with this cats and babies to having more content that passed 1 billion views and they are among attracts first-time viewers and prompts them the top 50 most-viewed channels on You- professional content push to click the all-important “subscribe” button. Tube. Online stars such as video prankster Since launching six months ago, Fremantle- Cassetteboy and UK rapper Jamal Edwards it is potentially a danger to Media’s Pet Collective YouTube channel has (SB.TV) have even started to break through to attracted 75,000 subscribers – putting it close the mainstream. broadcast TV to the 100,000 “magic number” that the plat- More recently, TV execs such as Liz Mur- form has said is the key to success. u12

Television | www.rts.org.uk | November 2012 11 Online media

Jonathan Davenport Hat Trick Productions With YouTube [you know] who is watching… You can take bigger risks because you will know straight away if it’s not working, and you can change it

YouTube channels provide a way of drawing in subscribers – regular viewers – to broad- casters’ content, whether it is a web-only show, such as Midnight Beast (left), or

YouTube broadcast programmes

11 u “The more subscribers you have for your as Base79 and Rightster each operating hun- channel the more views you are going to get. Time spent watching TV channels dreds of channels on the platform and help- This is because when you log onto YouTube (Hours per person per month: selected channels) ing content owners to manage and monetise you are given the channels you subscribe to their rights. first,” explains Tavernier. BBC1 Being part of a group of channels helps All of this represents the maturing of You- Channel 5 on YouTube because it means you can cross Tube’s content and progress towards its goal ITV3 promote, get bigger audiences and sell more of attracting more and better quality advertis- Film 4 advertising. The strategy is called being part ers. YouTube is expected by Citigroup media CBeebies of a multi-channel network (MCN), and is analyst Mark Mahaney to generate $3.6bn in BBC News similar to the way Sky operates on its own global revenue in 2012, a 50% increase on the ITV4 platform of channels. previous year. Sky 1 Base79 is one of the biggest MCNs in This is an impressive online figure, but less CBBC Europe, working with 300 partners and over- so when compared with TV ad spend (UK TV YouTube seeing 550 channels on YouTube. Rightster, ad sales alone will total more than £3.2bn this Sky News meanwhile, recently bought an equity stake in year). YouTube also announced at Mipcom E4+1 Viral Spiral, the UK talent management com- that it will launch paid subscription channels ITV2+1 pany representing the YouTube viral hit, Char- starting next year, although Kyncl was short Challenge TV lie Bit My Finger, the platform’s most-viewed on detail. Sky Sports 2 viral video. It has been seen a staggering 500 Alan Wolk, global lead analyst for KIT Digi- Disney Channel million times since it debuted in 2007. tal, which works with big pay-TV operators, BBC HD “Google needs to make YouTube pay and it was sceptical about YouTube moving easily FX needs to grow up, but I think it still sees this into pay-TV: “If YouTube is seriously going Universal period as about increasing the time spent on to introduce pay-TV products, it will need to 0 5 10 15 20 35 YouTube and improving the user experience,” come up with a new brand and new brand Hours/person/month says Base 79 CEO and founder Ashley MacKen- name to house them, maybe Google Pro. It Source: IHS Screen Digest/Barb/Ukom zie. He points to the launch of skippable ads also needs a much better user interface. on YouTube two years ago, where users can “The overly busy – and I’m being kind – choose to watch or not, and advertisers only YouTube layout works for the occasional pay if their ads are watched. “How many media viewing of Gangnam Style, but won’t work for sional content push it is potentially a danger companies can afford to do that?” he asks. a two-hour movie.” to broadcast TV,” says Richard Broughton, Clearly, YouTube is going through a radical Some TV analysts see YouTube replicating head of broadband for HIS Screen Digest. He change and is already a major player in how the successful strategy of the US cable indus- forecasts that in the UK per-capita viewing of TV and TV-like content is being viewed and try in the 1980s, when visionaries such as Ted YouTube equates to 47 minutes a month. monetised. Turner (CNN) and John Hendricks (Discovery By this reckoning YouTube is getting more “Believe at your own risk that [the You- Channel) started commissioning their own viewing than some TV channels, including Tube] platform is based on homemade videos content because they couldn’t afford anything Sky News, E4+1, Disney Channel, FX and Uni- of cats in washing machines or a dog named else and they wanted it to be unique. versal Channel (see chart on the left). Fenton,” Elisabeth Murdoch warned at the “Five years ago YouTube was not a direct In the UK, the YouTube marketplace is sur- Edinburgh TV Festival in August. “YouTube is competitor to TV, but now with this profes- prisingly professional, with companies such beginning to behave like a market leader.” n

12 November 2012 | www.rts.org.uk | Television