For more than five years, YouTube (s GOOG) has thrived as the undisputed leader of long-tail content. But now it could be looking to rein in its content and create specialized premium channels as a way to build a more manageable user interface for connected devices, according to a report in the Wall Street Journal. While YouTube is ready to invest heavily in these channels, and on exclusive content to go in them, the initiative marks a vast departure from the site’s open platform for video sharing.
If true, the creation of 20 “premium channels” of content in vertical markets such as news, sports and entertainment shouldn’t come as a huge surprise. After all, YouTube recently acquired Next New Networks, which built its business on the creation and distribution of vertical channels of online video content. By bringing on Next New personnel, YouTube is gaining some expertise in how to program these channels, which will reportedly feature five to 10 hours of new content each week.
What is surprising, however, especially in light of YouTube’s reluctance to license content so far, is the $100 million that YouTube is reportedly willing to spend on the new project. Up until this point, the Google-owned site has compensated content creators with an ad split for monetization of their videos. But the price tag suggests that YouTube would be willing to not only share in the ad revenues with select partners, but could help them finance production and creation of these new video channels.
If so, that’s a major departure not just from the user-generated content business that YouTube launched with, but also a highly successful partner program. Over the last few months, YouTube has increasingly invested in those partners, by offering them a number of perks, including YouTube grants to finance future projects, holiday gift cards to help them upgrade equipment, and even create educational programs for some of the best and brightest producers on the site.
But all of those initiatives were aimed at gaining more grassroots semi-professional content on YouTube. The latest initiative would reportedly include reaching out to more traditional and professional content creators to help build content for the site. The whole initiative could not just change how the front page looks. For a number of users who rely on YouTube to share videos with friends, it could drive some less professional creators away.
It’ll be a difficult balance for YouTube to strike — between the open, free-form community that has helped it grow to be far and away the number one video distributor online and the growing media company that increasingly seeks to nurture professional and semi-professional content to highlight on its front page and run ads against.