YouTube’s 100 Channels Show Promise

– But Premium Channels Must Be Better Marketed…

-…And Easier to Find

By Brittany Demmon, English major, and Abby Thibodaux, Mass Comm major

Getting detailed information about YouTube’s venture to launch 100 mostly English language channels (they’re sort of like TV channels) is difficult to find. So we asked two university students that work part time for Rider Research to see what they could dig up. We selected college students because that appears to be the main demographic that the YouTube Channels are intended to attract. The two spent the better part of a week (paid, of course) during their summer break to prepare this report and accompanying chart.

Google has committed to spending some $350 million dollars on YouTube’s venture to launch 100 channels with original content. The question is whether the money that’s used to develop content and market the new channels can help this exclusive Web content to take off, and thus cause viewership troubles for pay TV. Google has invested $200 million dollars toward the marketing of its free, professionally produced content after the initial $150 million investment last year to get it produced.

The 100 channels feature original content sponsored by start- up companies plus heavyweights such as Hearst Magazine, Demand Media and Digital Broadcasting Group.

Some of the one hundred channels that YouTube added can already rival prime time television on pay TV. We checked out the YouTube Premium Channel WIGS, a women’s mini-soap channel complete with big time actresses like Julia Stiles, Jena Malone, America Ferrera and Jennifer Garner. In competition with Lifetime Network, the WIGS channel offers short 8-11 minute episodes of drama that cater to busy moms who want a quick fix of day time TV on demand. People looking for quick news on the go can turn to Slate News Channel rather than waiting for the 5 PM newscast. NBC’s “So You Think You Can Dance” followers can click over to the DanceOn Network, which co-partners with Madonna to watch killer dance moves whenever they want. Anyone interested in the latest in the automotive world can turn to networks partnered with Ford or Cadillac. Sports gurus that are attached to their ESPN highlights can click to YouTube’s The Bleacher Report for the latest in sports news.

Pros: – It’s free! It’s free! It’s free! – Watch what you want, when you want – Episodes are available in shorter time duration for busier viewers – Fewer commercial interruptions, more viewing – No channel scrolling and less hassle

Cons: – No “mainstream” content – Less promotion on TV so you have to know what you’re looking for – The quality of most of its exclusive channels is still not up to par with pay TV – Far fewer channels than pay TV – You have to wade through other content to get through to one episode

The Advertising Battle The advertising battle has already started. Pay TV channels are running advertisements for their shows on YouTube channels that feature similar content. For example, ABC Family’s “Bunheads,” a series about ballet dancing, was advertised before a video on YouTube’s DanceOn channel. NBC’s airing of the 2012 Olympics is advertised on many news and sports YouTube channels.

YouTube has taken a different approach at advertising. The YouTube channel Thrash Lab features a show, “Dream Bigger” with Ashton Kutcher. The show seeks out content developers in a contest to see who can create the next Web series.

Call it self-promotion; Google has made an endless rotation because its money goes to work at creating an original series about creating an original Web series, meaning more content for YouTube.

If and when YouTube Premium Channels take off, pay TV companies may see decreases in viewers and revenue. Advertisements will sell for less money, as they will be viewed by fewer people, and in short, become a less effective marketing method. Pay TV viewership may slowly dwindle as consumers begin to utilize the “anytime” content availability more regularly.

Google said in a statement that its goal behind the channel expansion, in addition to the funding of grants and educational programs is, “to bring an even broader range of entertainment to YouTube, giving you more reasons to keep coming back.”

In response to its effects on advertising, it was said “these channels represent a new way to engage and reach their global consumers.”

Without seeming to pose a threat to pay TV, YouTube clearly has enough presence to impact the pay TV industry. Now may be the time for content producers to join the movement toward free ad-supported content.

Most viewers will not be swayed away from the living room TV based on lifestyle channels and small, unknown scripted series on YouTube, but with massive efforts, YouTube is capable of capturing a large audience.

If YouTube were to steer toward episodic, scripted, professionally-written and produced shows, like “Mad Men” or “Glee,” the odds for success would be in its favor as many viewers want to watch those types of shows.

Shifts in content consumption can be written off on the basis of cost, availability, and quality. YouTube is as available as any Wi-Fi connection, and costs nothing besides what the viewer pays each month for broadband, which he is going to get anyway to search, find information, look for a job, get directions and buy goods and services. And, while YouTube has traditionally been geared toward providing videos made by amateurs and clips from television sources, $350 million dollars is a very large investment toward providing original, professional quality content.

Demographics One of the greatest struggles YouTube will face is meeting the needs of different demographics.

Those 30 and above are more likely to stick to pay TV, as they know it to be tried and true. Some who have attempted to cut the pay TV cord and go all in for OTT quickly find that there are a few channels they (still) really want to watch, can’t find anywhere else and in the end re-subscribe to pay TV.

The future of OTT services lies in the rising 18-25 year old demographic. OTT is something they are embracing as a great money and time saver. While pay TV is an amenity often included in multiple dwelling units, if given the option, many young people would opt out of paying for fixed scheduled content.

An employee at Rider Research went home and watched WIGS on YouTube for an hour after discovering the channel in preparation for this article. Another cut the pay TV cord about a year ago, subsisting off of Hulu Plus and Netflix on the Roku smart TV adapter, and hasn’t looked back. By having content anytime, she has increased her productivity by eliminating “mindless TV” viewing, only turning on the TV to watch shows she follows regularly. Both are in the 18-25 age group.

The Fatal Flaw The most inexcusable error plaguing the YouTube Premium Channels is the difficulty in locating them. While YouTube is easy enough to navigate, new content, such as the 100 new channels, needs more organization in the search engine. When searching the premium channels, we found that more often than not the user is presented the correct channel as the fourth or fifth option, not the first. Keywords need to be specific, to the point of knowing the exact channel name and sometimes even the channel sponsor in order to find the desired channel. Although there are greater problems than not getting the channel desired on the first click, it is unacceptable for Google to settle for anything less than the easiest search possible for its users, especially if they want those view counts to keep rising, and ad revenue to keep streaming in.

Once YouTube searchers know where to look and what to look for, it all becomes very basic, with a list of genres that navigate you to your desired channel, or other channels of a similar interest. The problem is finding the index of channels on the YouTube Web site. Navigating from the homepage of YouTube, it is virtually impossible to find. Accessibility seems to be a major flaw in the YouTube channel venture, and critical to it’s success.

The Train Is Leaving the Station It is evident that original YouTube content has a long journey ahead before pay TV can view it as a major threat. But, the reality is that the change has already begun. YouTube and other OTT services cause viewers to stray, everyday. Even if a consumer spends only an hour a day viewing YouTube content instead of pay TV, an hour is enough time to legitimately affect pay TV, considering that the average consumer watches 3-5 hours of television daily.

Google has the means to make YouTube a major competitor against pay TV. It has already shelled out $350 million just to get the venture started. The question is, “Will content producers be prepared to deliver?”

Google seems to be dwarfed by pay TV’s hold on content and funding. But, over time, with the ease of access and proper promoting, Google can work its way into viewer’s homes by distracting them from pay TV with similar content that’s available all the time — and virtually for free. As new content is added to its list of premium original channels that can match pay TV’s most popular, viewers may find themselves turning to an easier to access and more available source for their media needs.

About the Author

The Online Reporter is the weekly subscription-based strategy bulletin about the enabling technologies of broadband, Wi-Fi, HDR, home networks, UHD 4K TV & OTT services; identifying trends in the Digital Media space. Only a fraction of our material here is published here. To see 4 free copies, follow the links above or go to

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