Although the world’s largest video site has rented and sold movies and TV shows from major studios since late 2008, most people watch videos on YouTube for free. Now, YouTube is introducing 30 all-you-can-watch channels that require a monthly fee. The least expensive of the channels will cost 99 cents a month but the average price is around $2.99.
Much of the conversation about online video has lately been dominated by Hollywood digital productions. But for every House of Cards on Netflix, there are dozens of less noteworthy attempts to bring television-style content to online video. These upper-echelon YouTube networks are interested in high-quality programming, too, but their model is more of a hybrid that places pricier productions atop a pyramid of user-generated videos.
The Chernin Group, the holding company of former News Corp. executive Peter Chernin, is leading an early investment round in MiTú, a Latino-focused YouTube network. Other investors include Machinima CEO Allen DeBevoise; Advancit Capital, Shari Redstone’s VC firm; and Code Advisors.
When YouTube launched its channels initiative a year ago, the channels were trumpeted as the next iteration in television. One year later, the revolution hasn’t quite played out the way the video site’s parent Google expected.
The search giant that kicked off an ambitious plan last February to establish dozens of professionally produced channels — most of which received some of the $100 million in initial funding handed out by the video-streaming site — is now looking to cut some of the less successful channels from its game plan.
Google said it will put another $200 million into its YouTube channel experiment as it attempts to upgrade its content from simple user-generated videos and to lure more viewers and advertising.
Google has been quietly developing a YouTube Developer Program with platform companies to bridge the gap between brand channels and viewers, according to companies participating in the program. The tools, developed by digital agencies, will support YouTube’s move to build out its channel strategy — another step closer to turning the video site into an online broadcast network.
The online video giant is aiming to create 25 hours of programming per day with the help of some of the top names in traditional TV, in a belief that it is laying groundwork for the future.