YouTube to Double Down on Its 'Channel' Experiment

By Amir Efrati for The Wall Street Journal 

For Google Inc.’s YouTube it was a $150 million experiment: Seed dozens of new video “channels” on its Web service and see what works.

So far, Google likes what it sees from the eight-month effort. The company says it will put in another $200 million to market the channels as it attempts to upgrade its content from simple user-generated videos and to lure more viewers and advertising.

The site has launched nearly 100 new channels so far this year, attracting talent such as actor Amy Poehler to create or star in original episodes in an effort to draw new audiences—and blue-chip advertisers.

YouTube has secured commitments from advertisers to run more than $150 million of ads on the channels this year, according to a person with direct knowledge of the sales.

YouTube officials declined to comment on the figures.

The channels themselves, meanwhile, are working to find their place, with a lot of trial and error along the way.

“Just because you build it doesn’t mean they’ll come,” says former television executive Larry Aidem, talking about YouTube viewers.

In February, Mr. Aidem launched a YouTube channel about emerging music artists. The channel, called MyISH, got off to a slow start, featuring many videos in which presenters simply talked about their favorite artists. “It was crickets,” said Mr. Aidem, previously chief executive of the Sundance cable-TV channel.

After studying viewer feedback, MyISH realized “the audience wasn’t big on talking heads” and wasn’t interested in a wide variety of musical genres. So Mr. Aidem and his team retooled the channel, hiring well-known YouTube personality Michael Buckley to anchor funny videos about pop stars like Katy Perry that also featured music clips. They also narrowed the channel’s focus to pop music.

Within weeks, MyISH shot up the rankings. It became the 120th-most-viewed YouTube channel in June with more than 700,000 unique visitors, up from a No. 803 ranking and 130,000 unique visitors in April, according to comScore Inc.

Mr. Aidem’s experience, which mirrors that of several other first-time YouTube producers, shows how finding the right formula to make a new channel stand out on the world’s leading video site remains a work in progress.

Robert Kyncl, a YouTube vice president and architect of the channels initiative, said his team and the channel creators are “feeling our way through” the process to find a “great blueprint” for the content will work best on the site.

He added that he’s pleased with the “very healthy growth” of the new channels so far. Among the new channels, 10 of them average more than one million video views per week, he said.

YouTube plans to expand its channels initiative to Europe by funding a couple dozen video channels for British and French viewers by next year, according to people familiar with its initiative. Mr. Kyncl declined to comment.

In contrast with TV, YouTube’s fast production process and the lower costs of online video means producers can make near-instant changes to their programs in response to viewer feedback. As a result, YouTube channel producers say the rapid evolution of their content will eventually allow them to find the best way to attract large audiences for the long term.

YouTube has tens of thousands of channels, created by active users who frequently post videos; some are much better than others.

The new, funded channels are designed to produce high-quality shows that are “brand safe” for advertisers, which pay a premium to put ads there. Other ads on the site could end up randomly next to, say, videos of funny cats or people demonstrating their New York accents.

YouTube’s channels initiative is a means to an end. By investing in the creation of professional-grade content and showing that there’s a viable economic model for it, YouTube hopes to encourage other professional video creators to join the site.

Overall, user growth for YouTube is picking up. People now watch four billion hours of video on the site per month, up from three billion earlier this year, said Mr. Kyncl.

The number of people who subscribe to channels has doubled since last year, he said, though YouTube won’t release specific figures.

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