It's the age of new television where all the old rules get thrown out the door—unlimited potential abounds. So why is it that Google is taking a page from old TV playbook and creating regularly scheduled programming?
Because that regularity is what brings people back. In an ambitious move, YouTube put up more than $100 million in cash advances to produce high-quality original content that will make up as many as a dozen scheduled channels; its first channel, Radar Latino was launched mid-November. Then yesterday, Google announced its big YouTube "refresh." (GigaOm's Janko Roettgers offers an early overview of the changes.)
The idea behind this is multidimensional. YouTube's foray into longer-form content dispels the myth it's home only to homemade low-quality snippets. But in addition, this content will likely reap in more advertising revenue as click-through rates are higher for longer-form online videos. To retain this new audience, the publisher is building channels on broad themes such as fashion and sports and plans to broadcast its content on a regular schedule.
YouTube, it appears, is not just encroaching on TV’s territory. It’s readying itself to be a direct competitor, borrowing elements from both linear and on-demand television. The YouTube platform allows Google to make its content available everywhere, from television screens via set-top boxes to the smaller screens of computers, smartphones and tablets. By publishing content on a consistent schedule, the most enthusiastic viewers come back every week, eager to find out the latest developments on their favorite shows. After the original broadcast, the content is “on demand,” available for watching and rewatching online.
Unlike television shows that get recorded and watched later, viewers here won’t be fast forwarding through commercials. In fact, in a study with 14,000 participants, Nielsen found that with ads accompanying full episodes watched online, brand impact resonates deeper than corresponding TV ads, especially among young viewers ages 13 to 34.
Google’s project to create channels and original content opens new doors for advertising. Whereas Hulu commands $25 or more to show an ad 1,000 times on its site, YouTube charges a fraction of that for its best content, according to one analyst’s estimate. If engagement is high and its channels prove successful, Google could start charging rates that parallel Hulu’s. But the money doesn’t stop there. To offset production costs, brands can sponsor the original content, an emerging trend in original web series.
Before the age of DVRs, broadcasters and networks used their regular schedules to bring audiences back to their weekly programming. For its original content, YouTube is incorporating this tried-and-true precedent and adapting it for the Internet—not exactly linear television, but nonetheless an interesting incorporation of its elements. If this becomes a successful strategy, the effects are threefold: viewers have more online entertainment options, advertisers see higher engagement and publishers gain new revenue streams.