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The YouTube Economy

How to Make Money & Influence People (Maybe)

Catie Peiper, Author
Audiences & Markets, page 1 of 2
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In November 2011, YouTube launched its “Original Channels Initiative,” with an initial $100 million budget that ended up being over $300 million (including marketing for the initiative).1 According to reports from Tubefilter, although the funding initiative ended and the majority of the channels are now defunct, the past two years have been an “experiment” that has allowed YouTube to study and research market interests: “[YouTube] learned that homegrown YouTube creators are far more likely to craft successful channels than traditional media stars, it learned that certain categories are bound to draw more viewers than others, and it learned that the average YouTube viewer prefers a channel loaded with content to one that functions like a TV channel.”2 From this perspective, the data collected from the initiative is not dissimilar to the data Netflix has collected regarding its own viewers’ preferences, which purportedly influenced how the company crafted its original series “House of Cards” and “Orange Is the New Black” in terms of both genre and distribution model (ie. dark comedies and political thrillers released in bulk for “binge” watching).

As a result of what YouTube has learned from the initiative, the company has redirected its funding from the creation of original channels and content to investing in production spaces (in London, Los Angeles, Tokyo, and — in 2014 — New York) to be used by some (but certainly not all) content creators in these hub areas. Thus far, YouTube has handpicked the content creators who have been able to use the spaces, limiting access to high profile and influential creators.3 This new model of investment is not unlike an incubator program for up-and-coming YouTubers, or for already successful creators who are launching a new channel, providing the facilities and tools needed to create content that YouTube has already decided will be of highest interest to viewers.


Citations
1. Guetelle, Sam. (2013, November 12). “YouTube Has Removed All References To Its Original Channels Initiative.” Tubefilter. Retrieved from http://www.tubefilter.com/2013/11/12/youtube-original-channels-initiative-experiment-end/
2. Ibid.
3. Ibid.
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