YouTube is the number one video-sharing website in the world and has been that for a while now. There’s no doubt about it, but is really Google monetizing the service as well as it should?
That’s a question for the ages, and, while nobody knows very well how much money is Mountain View investing in YouTube and what are the website’s revenues, we know that Google is trying to make YouTube more than the go-to place for watching cute cat videos and funny Gangnam Style parodies.
On that note, last October saw YouTube investing no less than $100 million in 100 original content channels in an attempt to “kick-start the ecosystem, bring in great creators, deepen our relationships with advertisers and grow viewership”.
Now, more than a year after the initial investment, it’s time to see how it all went and if the project is worth continuing. As usual, YouTube has been reluctant to talk numbers, failing to announce if the $100 million investment has at least been amortized.
What is clear nevertheless is that some of the partners will get a second round of funding, while a big chunk of the original 100 group will be left aside. More exactly, between 30 and 40% of the original partners have been deemed profitable and will get new financial backings of 1 to 5 million bucks, while the others failed to build the big audiences expected from them.
The top 25 new channels average more than a million views a week right now and the top 33 have over 100,000 subscribers, according to YouTube calculations, which seems to have been enough to make the backers happy. However, it’s pretty obvious that there’s room for progress, with YouTube garnering more than 19.2 billion views per week in total.
The initial 100 partners included big names in the entertainment industry, like Madonna or Jay-Z, as well as publications like The Wall Street Journal or satire organizations like The Onion, but “celebrity alone” hasn’t been enough to draw people in to the new channels.
“You need to have a commitment to the platform and to understand how to build your audience.”, said Courtney Holt, COO of Maker Studios. Aside from building audiences, YouTube’s goal for the project has also been to change advertisers’ perceptions, which, according to Allen Debevoise, CEO of Machinima, has been mostly accomplished.
“We believe in the strategy” also said John McCarus, senior VP-branded entertainment at Digitas, adding that “We have a handful of clients invested in YouTube and with this new round, we expect that to go up.”
YouTube will start notifying the partners that will get the second round of funding soon, while those that will be left out won’t be kicked off the website, but they’ll simply not get more money. However, they can’t sell their own ads either unless they’ve already paid YouTube back for the initial investment.
So, how do you guys feel about these original YouTube channels? Did you even know they existed? Do you think you'll start noticing them with this new round of funding? Is YouTube wasting money with this?