Peter Kafka

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Changing Channels: YouTube Will Pull the Plug on at Least 60 Percent of Its Programming Deals

YouTube has helped fund about 160 “channels” as part of a new strategy to make the video site more TV-like.

And just like the TV world, YouTube isn’t going to renew all of last season’s programs.

This week, Google’s video site will start offering new contracts to some of the channel programmers/creators it signed up in the last year. But not all of them: YouTube figures it will end up re-investing in up to 40 percent of its original channels by the time the renewal process is done.

YouTube will handle renewals in batches, starting with the first set of channels that launched in January of this year. The new deals will largely mirror the ones YouTube set up last year, where the programmers got advances of up to $5 million to produce videos that would live exclusively on the site for more than a year.

Channels that don’t get new deals won’t get kicked off YouTube, and executives say they hope content makers will continue producing stuff for the site. In the cases where YouTube hasn’t recouped its initial programming outlay, the site will continue to collect 100 percent of any revenue generated by the videos it paid for.

What determines who makes the cut? Jamie Byrne, YouTube’s director of content strategy, says the site is most concerned about engagement — primarily the total “watch time” a channel has generated — and cost — how efficient programmers have been with their programming budget.

Which means you can get a good sense of the most likely renewal candidates by looking at rankings published by Advertising Age and Deadline. But since those lists only measure video views, it’s possible that some channels with relatively high ratings may not get new deals.

Byrne and his boss Robert Kyncl are also not paying much attention to the channels’ financial performance — a tacit acknowledgement that advertising for the channels remains a work in progress.

“We’ve had some really great response from the advertiser community. As we continue to talk to advertisers and marketers, there’s a real sense that they’re looking at YouTube differently,” Byrne says. “But as we look at this initiative, we are taking the long view here. It’s not necessarily about immediate results.”

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I’m a giant vat of creative juices.

— David Pogue on why he’s joining Yahoo