The Best Show on Web Video Is the One You Can’t See: Inside the $100 Million YouTube Channel Sweepstakes

Published on July 11, 2011
by Peter Kafka

If this were a reality show, you’d definitely watch: Hundreds of competitors fighting for $100 million in prize money and a chance at worldwide exposure.

Alas, you won’t be able to view the event — just the winners. That’s because it’s a real-life competition, administered by YouTube, to see which video producers will be featured in the site’s upcoming overhaul.

Competitors are pitching Google’s video site this summer in hope of landing control of one of 20 “channels” it plans to feature in a new design, which will likely roll out in January.

The idea is that YouTube will end up with cable TV-like “verticals” — food, sports, entertainment, etc. — that will offer up consistent servings of audience- and advertising-friendly content. And that the winners YouTube selects to program the channels will get the exposure — and ad dollars — that only the world’s biggest video site can deliver.

In pitch meetings that can last an hour or more, producers are trying to sell the site’s executives on their vision for their channel, the shows they’d make or acquire for the channel, and their weekly programming strategies.

People familiar with the process tell me YouTube is telling potential partners they should know if they’ve won by late August or September.

Previous reports have focused on YouTube’s outreach to Hollywood talent agencies and production houses for the project, but I’m told the talent pool is pretty wide for this competition: If you can credibly argue that you’re good at making Web video, then you should be able to get a shot at this.

Again, here’s what you get if you win:

  • YouTube will give you up to $5 million to create a branded “channel” for the site, which it will feature prominently.
  • YouTube will sell ads against the channel, and will keep all revenue up until it recoups its $5 million outlay. After that, YouTube and the channel partner will split ad revenue, roughly fifty-fifty.
  • Content on the channel will initially be exclusive to YouTube. But after the first year of a three-year deal, channel partners can distribute their stuff wherever else they want.
  • Channel creators retain full ownership of all of their stuff.

Good prize, right? Except that several YouTube pitchers I’ve talked to aren’t completely enthusiastic about the competition.

Some of them, apparently, have had their feathers ruffled by what they describe as an impersonal “cattle call” process. They’ll get over that, though. The bigger issue is the one-year exclusivity agreement.

That clause requires producers to create original content — you can’t simply repurpose stuff you’ve already shown elsewhere. And some producers question whether it really makes sense to make new stuff without also being able to sell it to Netflix, Amazon, Hulu or any other outlet.

The flip side of the argument: Of course it makes sense to give the world’s biggest video site your stuff for a year — it’s the world’s biggest video site.

And not only is it the world’s biggest video site, it’s giving you money (or lending you interest-free money, if you want to look at it that way). And it will be trying very hard to give you the biggest promotional push it can, because it’s the biggest change in the company’s history since Google bought it in 2006. And the guys running the site — YouTube CEO Salar Kamangar and Robert Kyncl, the Netflix veteran Kamangar brought in last year to chat up Hollywood — really want it to work.

The flip side to that flip side: YouTube has been telling pitchers that it wants to hear how they intend to promote their own stuff, and how they can make their stuff go viral.

That is: Even the world’s biggest video site isn’t guaranteeing that it can make stuff popular on its own. Just like the TV channels it is trying emulate.

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