YouTube splashes out on big TV names to entice viewers

March 1st, 2012

YouTube is spending $100 million (£62.7 million) on original programming by top TV names in a bid to turn itself into a major online TV viewing destination.

The Google-owned site is hoping its investment in good content by famous producers, directors and other film-makers will attract more revenue from advertisers, as well as bringing viewers back frequently and boosting its parent company's web-connected TV platform, Google TV.

Under the plan, there will be 96 additional YouTube channels, which will act as artists' home pages, where viewers can watch existing video clips and subscribe to be alerted when new content is posted.

The new programming is particularly aimed at the 18 to 34 age group – a demographic that is turning away from TV in favour of watching online video on mobile phones, tablets and computers, and one that is sought after by advertisers.

The price that YouTube is seeking for its ads indicates it is serious about getting a return on its investment, and more. According to AdAge, early deals range from $5 million (£3.1 million) to $10 million (£6.3 million), but there is reportedly a $62 million (£38.8 million) price tag for an exclusive package of channels in categories such as music and pop culture. By offering exclusive sponsorships of channels and packages, YouTube "aims to ignite a frenzy among marketers afraid of being left out," says AdAge.

The fund – YouTube’s biggest spend on original content to date – has already lured some of TV's biggest stars over to online video production, including Fast Five director Justin Lin, who directs episodes of Community, CSI creator Anthony Zuiker and Nancy Tellem, the former president of CBS entertainment.

Mr Zuiker is working on a series for YouTube after observing that his pre-teen sons spend more time on phones, iPads and computers than watching TV.

"We want to jointly take the risk with YouTube and roll the dice on the future," he said. "The old regime is going to falter because everybody thinks the TV is the only device that really counts, and that's just not the case."