Peter Kafka

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YouTube, Which Wants More TV Dollars, Pays Up for More “Channels”

YouTube is ramping up its channel experiment.

Google is funding a new batch of video makers to join the 100 it launched in the last year. And it’s making an international push, by adding content for the U.K., German and French versions of the site.

YouTube says it will put money into more than 60 new “channels” — branded destinations that show a mix of original programming and clips pulled from around the Web. The idea is to make the site more “TV-like” — and convince viewers and advertisers to spend more time and money there.

Meanwhile, YouTube is in the midst of renewal talks with its first set of channels, that expect to hear about their fate in the next few weeks. In the announcement touting its new deals, YouTube is spending more time playing up the Web brands it is working with, like Everyday Health and PopSugar. A year ago, it touted links with the likes of Jay-Z and Madonna.

The expansion announcement comes as some channel partners have begun questioning the way YouTube has run its experiment. Their biggest gripe: They haven’t received much guidance or support from the video platform and have been left to their own devices — especially when it comes to marketing and distributing their clips.

Privately, YouTube officials argue that channel partners shouldn’t be complaining, since the deal terms were well-established at the beginning. Publicly, they point to statistics that show growth for the new channels. They say 25 of the channels now average more than a million views a week, for instance, up from 10 channels earlier this year.

Robert Kyncl, the former Netflix executive who has spearheaded the channel push for Google, says new YouTube programmers may need “a couple of years to gain a certain velocity and a certain volume.” Once they do, he says, the company plans on offering a group of them even more incentives to work for the platform.

“What we will look to do is provide them with greater revenue predictability, for multiple years, so they can focus on building their channels and on building their audiences,” he says. (Full interview)

YouTube’s new channels deals are roughly similar to the ones they offered last year: Google hands the channel makers interest-free advances in exchange for exclusive access to their content for a year or more; Google keeps all ad revenue until it clears its advance and shares it with creators after that.

But there are some variations. People familiar with the deals say that Google is likely handing out smaller advances to European programmers, because the video ad market pays out less than in America.

And some of the American deals are different than last year’s as well. In some cases, for instance, Google has made multiple-year committments to the content-makers, instead of making them year-by-year renewals.

Several of the new American channels are extensions of brands that already existed prior to YouTube’s involvement. Mahalo and Vice will contribute channels, for instance. So will ESPN’s Grantland site, run by Web star Bill Simmons. Several of those sites, like Grantland, have already launched their channels in recent weeks.

Also signing up: Revision3, the Web studio now owned by Discovery Communications. In August, Revision3 CEO Jim Louderback argued that some YouTube stars were abandoning the platform, a move he called misguided.

Here’s a clip from SourceFed, arguably the most successful of the new YouTube channels launched in the last year. It’s run by Phil DeFranco, who was already an established YouTube star prior to his deal.

(Shutterstock/Tatiana Popova)

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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work