"Part of the reason to go to other portals is you're committing
to advertising partners to give them a certain amount of
impressions to make the proposition less risky and you can't get
enough of them, frankly, on YouTube," said Larry Aidem, CEO of
YouTube network IconicTV which he runs with fellow Viacom alum Michael
started shelling out funds to networks and filmmakers to
produce original "channels" more than a year ago, the company
included an exclusivity clause in those contracts confining those
videos to YouTube for one year or until their investment was
recouped through ad sales. But in February, YouTube began removing
that requirement. That has freed up its funded partners to
syndicate their series elsewhere in order to expand their audiences
and boost revenues.
"The irony is YouTube's absolutely on board with this strategy,"
said Kiliaen Van Rensselaer, senior-VP at Fox, of the network
extending its scripted channel WIGS, producer of several TV-quality
dramatic series invented for YouTube, to a competing outlet,
Seeking older viewers
Even though YouTube's 1 billion monthly unique viewers would appear
to offer all the audience a network needs, Mr. Van Rensselaer said
Fox had closely observed Hulu grow its audience of 18- to
54-year-old women, which he described as "really the sweet spot for
Express- and Unilever-sponsored]
WIGS." He added, "It's probably easier to imagine on Hulu the
target audience being a great fit whereas YouTube has got a much
bigger endemic audience of 13- to 17-year-olds and 18- to
Some could ultimately wean themselves off YouTube altogether,
though the more likely scenario will keep most anchored on YouTube
for the near future. "They've relaxed the exclusivity, but they
haven't given up non-exclusivity," said Mr. Aidem, whose company
later this year will syndicate two channels -- Jay-Z's Life &
Times and an upcoming show with former "The Today Show" anchor
Meredith Vieira -- to television but will not be barring those
videos from YouTube.
The old thinking: exclusivity was key to keep the views and the
revenue on YouTube. The new thinking: if a creator can build their
brand off YouTube, that will drive viewers, and ultimately revenue,
"We're happy to see our creators growing their fan communities
across entertainment and social media platforms, and believe that
increased awareness builds brands, generates interest among
advertisers and most importantly, drives fan engagement with their
YouTube channels," a YouTube spokesperson said.
Last year, the notion of building an independent video brand off of
YouTube seemed far-fetched given its dominance. But some of
YouTube's biggest stars are doing just that. Online video site Blip
a production deal with Ray William Johnson (who also has a
script deal with cable network FX) and another with YouTube
partner My Damn Channel for four new series that would be exclusive
to Blip and MyDamnChannel.com for 30 days before hitting Google's site.
Then there's Facebook. The social network has expressed interest
to YouTube creators in setting up a video distribution arm,
according to sources with knowledge of those talks.
After a few years of building audience on YouTube, ad revenues
remain small, a disappointment for those hoping to build
next-generation media companies there. Internet entrepreneur Jason
Calacanis gave voice to the dissatisfaction in a blog post where he
claimed to have turned down YouTube funding and is now "exploring
the notion of divesting ourselves of our YouTube channels."
The average preroll ad on the site (not including those sold
directly) has fallen from $9.26 for every thousand impressions in
the second quarter of 2012 to $7.49 in Q2 2013, according to video
ad buying platform TubeMogul.
A 'no brainer'
For bigger programmers with their own ad sales operations,
distributing everywhere – including YouTube – is the
way to go. "The notion that folks growing on YouTube would look for
other places [to air their videos] is almost a no-brainer," said
Fullscreen CEO and founder George Strompolos, who previously worked
at YouTube and co-created the YouTube Partner Program in 2007.
Similarly IconicTV sells ads and sponsorship packages on its
channels in a joint partnership with Google. As does Fox, though
Mr. Van Rensselaer admitted "we'd prefer to handle it all
Smaller programmers, like cooking channel Tastemade, will
probably continue to leave the ad sales to YouTube. "Until we have
a large enough audience, there's no need for us to invest in a
sales infrastructure," said cofounder Steven Kydd, a former exec at
"Having that direct relationship is a good thing, but you've got
to be at the Vevo level, the Machinima level, to be able to do it,"
said Razorfish chief media officer Jeff