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YouTube’s New Content Push: Investing in Its Own Stars

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YouTube’s New Content Push: Investing in Its Own Stars

Post  Admin on Fri Jul 18, 2014 4:10 pm

As YouTube’s home-grown stars seek bigger stages, Google wants a share of the benefits.

YouTube has approached many of the site’s top video-makers in recent weeks, offering to fund additional programming in return for a portion of the proceeds when creators distribute the content elsewhere, according to three people familiar with the discussions.

Negotiations are said to be in their early stages, according to these people. The terms that YouTube is offering aren’t clear, nor the aggregate amount the company is looking to invest.

“We are always exploring various content and marketing ideas to support and accelerate our creators,” said a YouTube spokeswoman.

The strategy is another sign of how Google is trying to cultivate talent on YouTube, after years in which many content creators felt underappreciated. YouTube has run marketing spots to promote some stars, and launched a program to help them boost ad rates.

Three years ago, Google paid around tens of millions in advances to attract traditional stars and established media brands to create “original channels” on YouTube. A few channels caught on, like Vice Media Inc.’s Vice channel. But many others, like Demand Media Inc.DMD +4.21%’s eHow Home, failed to find big audiences on YouTube.

YouTube’s effort to nurture home-grown talent comes as many YouTube stars seek to reduce their dependence on the video site, where they have complained it is difficult to make money. Ad rates tend to be low because there are so many videos, and Google pockets roughly 45% of the ad revenue.

Some YouTube producers are building their own websites, where they keep more of what they earn. Dreamworks Animation 'sDWA +1.57% Awesomeness TV, a successful network of YouTube channels, has its own show on Nickelodeon, now in its second season.

Last month, the distributors of a YouTube serial called Wigs signed a deal with rival online-video service Hulu to host its newest season. YouTube executives were unhappy because they felt YouTube had helped Wigs build its audience, according to two people familiar with internal discussions.

Reuters recently reported that YouTube was seeking deals in Hollywood to support premium content.


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