YouTube enlists big-name help to redefine channels

By Ryan Nakashima

Associated Press

Published: Monday, Feb. 20 2012 8:14 p.m. MST

Arthur Hong holds a clapboard while filming holiday movie trailers at the Maker Studios in Culver City, Calif. The company has received money for three YouTube channels.

Associated Press

CULVER CITY, Calif. — YouTube is enlisting Hollywood's help to reach a generation of viewers more familiar with smartphones than TV remotes.

The online video giant is aiming to create 25 hours of programming per day with the help of some of the top names in traditional TV. The Google-owned site is spreading its wealth among producers, directors, and other filmmakers, using a $100 million pot of seed money it committed last fall. The fund represents YouTube's largest spending on original content so far.

YouTube believes it is laying groundwork for the future. While the number of traditional TV watchers has leveled off in recent years, more and more people are watching video on mobile phones, tablets and computers, especially the 18- to 34-year-old age demographic that advertisers covet.

The cash has enticed some of TV's biggest stars, including "Fast Five" director Justin Lin, who directs episodes of "Community," "CSI" creator Anthony Zuiker and Nancy Tellem, the former president of CBS entertainment.

Zuiker is teaming up on a horror series for YouTube after observing his own family's behavior. His three pre-teen sons spend more time on phones, iPads and computers than watching TV these days.

"We want to jointly take the risk with YouTube and roll the dice on the future," Zuiker says. "The old regime is going to falter because everybody thinks the TV is the only device that really counts, and that's just not the case."

For producers, it's a chance to create shows that are completely free of meddling from major studios. They can also stay relevant with a younger crowd whose viewing is moving increasingly online.

"This was really about galvanizing the ecosystem at large," says Alex Carloss, global head of original programming for YouTube. "We see the portfolio (of funded channels) really representing the best of TV meeting the best of the Web."

YouTube isn't the only Web video service that has started to pay for original content. Netflix Inc. recently launched the original series "Lilyhammer," while Hulu premiered "Battleground." But YouTube videos tend to be under 10 minutes, instead of fitting into traditional half-hour or hour-long TV slots. And aside from a few guidelines, ultimate control is given over to the artist, including what is uploaded and when new episodes appear.

Although YouTube's entire investment is less than half of what some studios spend on one blockbuster movie, about a third of the new channels were awarded to scrappy YouTube veterans who already know how to make it big online while keeping production costs low.

At Maker Studios, which received money for three new channels, the funds have turbo-charged an already teeming operation that has about 160 full-time staff spread across several buildings crammed with props and computers in the west Los Angeles suburb of Culver City.

Maker cranks out about 300 YouTube videos each month at a bare-bones cost of about $1,000 each. The studio's videos generate a whopping 500 million views each month.

Advertisers pay up to $10 per thousand views for video ads that precede the featured content, according to TubeMogul, a major buyer of YouTube ads for the nation's biggest advertisers including Proctor & Gamble Co. and News Corp.'s 20th Century Fox movie studio.

Analysts believe YouTube has made a wise investment at a time ad rates for online video are rising.

YouTube can be successful with just a few big hits even if thousands of videos fall flat. It's similar to the hit-or-miss approach to traditional TV and movies.

"The investor community does not look at this as money wasted," Macquarie analyst Ben Schachter says.

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