Peter Kafka

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YouTube Channel Guide Robert Kyncl Talks About What’s Working, What Isn’t (Q&A)

It’s way too early to assess the impact of YouTube’s channel experiment. But we can definitely say that Robert Kyncl, the guy twisting the dials, has had a huge effect since he joined the company two years ago.

The channel idea itself — throw money at Hollywood stars, Web stars, and anyone else who looks like they can make “premium”-looking video, so that YouTube looks less like amateur hour and more like TV — is all Kyncl’s.

And, with the exception of a few rare appearances from YouTube head Salar Kamangar, Kyncl has now become YouTube’s public face. He was the guy logging lots of stage time at YouTube’s high-gloss advertiser event last spring. Which meant he was as important to the pitch as Jay-Z.

So, anytime I can get an extended interview with Kyncl, I’m taking it. Here’s an edited transcript of our chat, timed to the launch of his newest channels.

We talk about why some new channels are working, and some aren’t (hint: It’s not just the content), and why YouTube wants to be as big as TV, without being TV. And, for the record, I got to ask him about his job prospects, a subject of some chatter recently.

It runs long, in part because Kyncl has this “roadster on the autobahn” metaphor he wants to use. But this isn’t a fast-twitch YouTube clip — you’ve got a couple minutes to read it, right?

Peter Kafka: You announced your first set of channel deals a year ago, now you’re announcing dozens more. How’s it going?

Robert Kyncl: Think about YouTube as a car on the freeway. When we launched YouTube in 2005, we simply went into gear one: That’s being available everywhere in the world. But if you live in Turkey, there’s nothing localized for you. No local content, no local partners, nothing.

Then we started to look at different countries, and realized, oh, there’s great potential. Why not try to localize there, offer different resources, let us have resources for ad sales and partnerships. Once we do that, we’re in gear two, and today we have over 40 countries in gear two. Turkey just went into gear two this week.

Then we start looking at device connectivity rates, monetization rates, user adoption growth. And in the U.S., we decided to go into gear three. That’s where we’re putting money at risk to catalyze the creative community — both existing partners and new — to create many new channels, new programming brands.

So what we’re announcing today is that we’re going into gear three with the U.K., Germany and France. And we know from our own data that it takes programmers a couple of years to gain a certain velocity and a certain volume, so you can expect us to be in gear three for a couple of years.

Then we’ll move to gear four. We’re still working on details, but what I can tell you is that gear four will be only available to partners who are already on YouTube.

What does that mean?

What we will look to do is provide them with great revenue predictability, for multiple years, so they can focus on building their channels and on building their audiences, rather than focusing on fundraising.

Does that mean bigger advances, longer deals?

It could have many different forms, that could be one of those. Nothing has been formalized. The key point is that it focuses on partners who are already successful on YouTube.

We want them to help them be as big as TV channels, and drive a lot of viewership and growth. And we want to make sure all of their attention goes to that.

And all the while, we’re working on our discovery, our monetization, device connectivity — everything. At some point, all of that will be so great that we will have fantastic pull with all content providers, who will be publishing their fantastic new channels to YouTube, and we won’t have to do many of these things, if at all. And we’ll simply go into gear five, put the whole thing into cruise control, and head down the freeway.

So how much money do you need to invest to get top speed?

I would be lying if I told you I knew.

Now that you’re a year into this, what have you learned?

Lesson one: Audience development is equally as important as great content. By creating fantastic content and spending zero time on audience development, you are certain that you will not succeed on YouTube. You have to focus on audience development as much as you focus on creating content.

But you knew that already, right? Everyone who pitched you last year had to explain how they were going to market and distribute their stuff, without your help.

We knew it. But we couldn’t tell with a great certainty. Now we know.

I’m talking about sustained success. Everybody can have a viral success. You find something unique, that can happen. But what we want is for people to repeat things over and over and build great brands. And for that, you need to work with audience development.

There’s a function with every TV channel, which is called a programmer, and they have great expertise in prime-time flow, and late-night flow, and they figure out the best way to optimize channel viewership. And then they also have marketing people. What audience development on YouTube means is really taking the marketing function from the TV channel, plus the programming function from the TV channel, and combining them into a job called audience development.

Who’s supposed to do that? The content creator or YouTube?

The content creator. That’s why I’m saying it’s similar to what happens with TV channels. Where you have programmers who schedule and figure out prime-time flow. As things go more and more on-demand and less linear, the prime-time flow expertise is less needed. You have to learn how you program in an on-demand world, which is a much different skill set.

This is the gripe I hear from some of the channels you funded — that you haven’t helped them with marketing and promotion, even though you didn’t say you would. Or, to put it another way — you guys want to be treated like TV programmers, but you won’t act like TV programmers, and help promote shows, etc.

We don’t want to act like a TV programmer. We act like a platform. We’re absolutely not a TV programmer. So if people are saying we’re not acting like one, I’m thrilled. It means we’re doing exactly what we should be doing.

Other lessons?

Collaborations. A huge thing. They help keep programming fresh, and help connect audiences from one channel to another.

That’s getting someone who already has a YouTube following to appear on someone else’s show? 

Yes. Different call-outs, different programming collaborations together. When they’re thematically linked channels, it’s easy to introduce other channels. It drives significant volume of subscriptions. And subscribers on YouTube generally consume twice as much as nonsubscribers.

That’s an old-time TV trick.

Yes. Think about Stephen Colbert launching his show. There was tremendous amount of collaboration on “The Daily Show.” It’s the same idea. It’s just on a different platform.

What about all the people who are making stuff on YouTube who don’t have deals with you? What are they supposed to make of all the attention, money and help you’re giving the premium channels?

I never call the channels “premium channels.” I simply call it funded channels, or self-funded channels. People make them themselves, or some we help. What we pride ourselves on is mixing all of that together. We have individuals who are creating in the garage, mixed together with Disney. That’s fantastic. That only happens on our platform. What we’re merely doing today is accelerating interesting partners and bringing new ones on.

And at the other end of the spectrum, what about doing deals with actual TV producers and programmers, and letting them sell cable-style subscriptions on YouTube?

I think the best way to think about it is an additional feature of our service, that each of our programming brands will have. So that they can get an additional source of revenue.

What if I’m, say, Bloomberg TV, and I want to get additional distribution on YouTube, because I think I’ve maxed out my reach on cable. Will you guys cut a deal with me?

We constantly want new partners coming to YouTube. That is the whole premise of us growing. So, of course, we want new partners to come in and build their business on YouTube.

You invested in Machinima earlier this year. That’s the first time you’ve taken a direct stake in a video creator. Will you do more of those deals?

What we saw was a great success story, and they were in the market fundraising. And we happened to be around, and interested in their future growth, and this was one way to do it. It’s sort of difficult to see what happens in the future. But I would say it’s possible that we would do that again.

Are you going to run this company at some point? Are you going to run YouTube?

[Laughs] I’m not sure how to answer that. I’m very happy with my current job.

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