With YouTube expected to announce the roll-out of its original channels initiative in Europe at Mipcom next week and a growing throng of digital buyers arriving, Jonathan Webdale reflects on how the market has changed since Google acquired the world’s biggest online video website.
Next week, it will be six years since Cannes was agog at GooTube. News of Google’s US$1.65bn acquisition of an 18-month-old online video-sharing service that hadn’t yet made a dime had jaws dropping along the Croisette in the early hours of a Tuesday morning.
Back then, YouTube was derided as being all about dogs on skateboards, the kind of user-generated content brands wouldn’t touch with a bargepole, at worst a facilitator of online piracy. Viacom was first to leap on such suggestions. While that case still rumbles on, much else has changed, not least the fact that analysts estimate the site will generate US$2bn to US$3bn in revenue this year.
This coming Monday, Google/YouTube VP and global head of content Robert Kyncl will take to the stage in the Palais, where he’s expected to announce the European extension of an initiative the firm unveiled in the US at the end of last year.
One of the major gripes against YouTube has always been its reluctance to invest in content. But it reportedly stumped up some US$100m in advances to support the launch of around 100 channels – a selection deemed to meet high enough standards of production, management, popularity and advertiser-friendliness.
New channel partners continue to launch stateside as part of a staggered roll-out, but reports are surfacing that some of the early beneficiaries could soon find their funding drying up as YouTube focuses on the best performers and supporting new ones elsewhere.
Extending the scheme to Europe – a process that was already underway at MipTV earlier this year – is a natural progression and it will be fascinating to see how far the plan extends.
Google has recently abandoned attempts to crack the traditional TV ad market, but then again it doesn’t really have to. After all, it can build an entirely new business from the ground up, deploying its own fibre network and, through the channels initiative, a new layer of entertainment on top, mirroring the early days of cable TV. Assume Google TV will finally gain some traction and with Android smartphones still the market leader, at least in the US, there’s a pretty compelling living room reinvention right there – not to mention all the other compatible Android devices flooding the market. Never mind the mythical Apple TV.
Six years ago and until very recently it was inconceivable that Disney would license any of its content to YouTube but last fall the pair struck a deal to start offering family-friendly shortform content together, an arrangement that was extended to full-length programming earlier this year.
This month, Recipe Rehab, a show that started life on the Everyday Health’s YouTube channel, will become the first to make the transition to traditional TV, with Disney’s ABC network ordering a remake for its 200 local affiliate stations.
While this is great for headline writers, it’s worth bearing in mind the show was created by former Reveille MD Mark Koops, whose credits include The Biggest Loser and MasterChef, and Everyday Health already has its own eponymous Emmy-nominated TV show on ABC stations.
There’s a lot of traditional TV talent behind many of these YouTube channels – the financial incentives are finally sufficient – but there is also an array of native online video talent too. Everyday Health has just bought out Eqal, the company set up by the creators of Lonelygirl15 and Bebo follow-up Kate Modern.
How times have changed. Even AOL, the one-time parent of Bebo (something it would no doubt prefer to forget) has just this month signed a deal that will see its entire library of original video land on YouTube, via 22 dedicated channels for brands including The Huffington Post and TechCrunch.
But Mipcom this year won’t by any means be just about YouTube. Let’s not forget Hulu, which is putting up far more in the way of cash for original content than the Google behemoth. Hulu CEO Jason Kilar – speculation about whose future persists – will take to the stage on Tuesday, having pledged to spend US$500m on programming this year.
Hulu has been forced to step up to the mark partly as a result of competition from Netflix, whose chief content officer Ted Sarandos stole the limelight at Mipcom last year. Netflix is taking a backseat this time, though Kevin Spacey will be in Cannes to promote its next major original series House of Cards. At least half a dozen buyers from the company will be present, however.
Other digital buyers doing the rounds will be representatives from Amazon – both from the US and from its wholly owned UK business Lovefilm – plus the likes of Tesco-owned Blinkbox from the same territory. A string of newer entrants will be circling too – representatives from Russian VoD sites like Tvigle and Stream, plus others such as recently merged Chinese giant Youku-Todou.
Then there are others operating even further under the radar – a buyer from US book retailer Barnes & Noble’s freshly announced Nook Video; and a couple of reps from Intel, scoping out things on behalf of former BBC exec Erik Huggers, whose attempts to build an internet TV service at the company have reportedly hit delays in recent months.
Then there’s Vdio, a sister business to Rdio that’s still in stealth mode and is backed by Skype cofounder Janus Friis. The last time he and his cohorts were sniffing around Mipcom was under the guise of The Venice Project, a start-up that later became the ill-fated Joost. That was also six years ago. Reps from Vdio will also be in Cannes this year. Mipcom 2012 has all the makings of a fascinating event.