YouTube’s Moves Signal OTT Competitiveness

It began in April.

Shortly before the 2015 Digital Newfronts, YouTube offered some major announcements.

First, the streaming website stated that it would be sponsoring wholly original series from popular content creators like the Fines Brothers, Prank vs. Prank, Joey Graceffa and Smosh.

In the same breath, YouTube also revealed a partnership with AwesomenessTV, a Los Angeles-based entertainment company, to develop YouTube-inspired movies.

"We hope that these new series and feature films, as well as those that follow, give top creators a new way to showcase their talent to fans on YouTube," said Alex Carloss, YouTube Head of Originals.

This month, YouTube made a major hire – Susanne Daniels, the former president of programming for MTV. As the new Vice President of YouTube Originals, she’ll be Carloss’ boss.

The appointment quickly raised eyebrows, like those of Variety co-editor-in-chief Andrew Wallenstein:

What could be inspiring all of this action? The Washington Post observes:

“The top five YouTube stars have more subscribers than the population of Mexico. Followers of their channels are double the number of all U.S. cable television viewers.”

It is a turning point for online video advertising and marketing.

“You’ve seen cable TV ratings fall double digits for the first time, which means your main conduit just fell off a cliff,” said Mike Henry, chief executive of YouTube analytics firm OpenSlate. “I haven’t had a single conversation with a brand that hasn’t shifted money into digital.”

Later in the year, YouTube will be unveiling a paid over-the-top (OTT) subscription service, and it is believed that it will feature several of the above-mentioned original series, and possibly others.

Already, investors have been located.

“We are progressing according to plan,” YouTube said recently. “We have support from the overwhelming majority of our partners, with well over 90 percent of YouTube watchtime covered by agreements, and more in the pipeline about to close.”

Time will tell if YouTube’s most popular stars and series will attract the ad dollars and subscribers like other OTT services. Considering the amount of people tuned in now, it looks like they’re off to a decent start.

Author: Brian Cameron
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