The eighth annual VidCon starts today, and all eyes are on YouTube, the world’s biggest platform for online video. It’s been almost two years since the company announced Red, its subscription service, and began creating ad-free original content that would exist behind a paywall. While the company hasn’t shared any hard subscriber numbers yet, it’s made clear that its bet on original programming is only going to grow.
For its first season, YouTube Red produced 24 films and series. This year, the company plans to produce more than 40 originals, and will reportedly commit hundreds of millions of dollars to the effort. While expanding its efforts around originals, YouTube is also making one major strategic change. The first slate of original programming was built exclusively around homegrown talent like PewDiePie and Lily Singh, but the next phase of YouTube-produced shows will also feature shows built around celebrities including Katy Perry, Kevin Hart, Ellen DeGeneres, and Dwayne “The Rock” Johnson.
“We think we can have both,” said Susanne Daniels, a veteran of MTV who joined YouTube to lead its original programming efforts. The first season of YouTube Red originals have so far garnered just under 250 million views, but the audience was heavily concentrated among kids under the age of 18. By bringing on well-known celebrities and franchises, Daniels is hoping to expand that demographic. “The future will be more like 50 percent homegrown YouTube stars and 50 percent programming that isn’t endemic to the platform.”
YouTube isn’t aiming to make highbrow drama like House of Cards or Transparent — at least not yet. It’s hoping to extend its reach with series like Step Up, a popular film franchise with proven global appeal that resonates with one of the key genres on YouTube: dance videos. And while Lionsgate will produce the series, plenty of native YouTube talent will be featured. Daniels is also betting her audience will move beyond the 10- and 20-minute videos shown during Red’s first season. For Step Up, episodes over 40 minutes are in the works. The original programming also gets prime real estate on YouTube TV, which announced today that it’s expanding from five to 15 markets.
The Brandcast event in New York last month was a chance to show off the big celebrity partnerships. VidCon is a chance to return the spotlight to the native talent. The company announced six new Red originals starring YouTube talent at the event; they are also picking up six originals for a second season. And this afternoon YouTube CEO Susan Wojcicki delivered the opening keynote with Rhett and Link, co-stars of the Buddy System series, a homegrown success story for Red.
The pair have been dreaming for decades about making a narrative series. “We were writing screenplays together back in middle school,” says Rhett in a phone interview. But while they made a living off Good Mythical Morning, the traditional business of YouTube didn’t allow them to venture beyond their daily diet of stunts, challenges, and conversational vlogs. “The financial model of ad-supported shows, you have to find something easy to make, make a lot of it, make it cheaply, and recoup your investment through ads.”
With the advent of YouTube Red, the dynamic changed. Rhett and Link got the chance to create a scripted original, Buddy System, with the production financed by YouTube, and the episodes only available to Red Subscribers paying $ 9.99 a month. But whether or not the Buddy System audience would follow the pair to Red was unknown. “If you’re a successful vlogger, does that translate into being able to make narrative content people want?” asked Rhett.
The answer after season 1 has been a definitive yes. According to Variety’s “In Demand” ratings, excitement from fans exceeded the chatter around productions from Netflix and Amazon with much bigger budgets. An audience accustomed to videos between five and seven minutes in length were sitting down for 10- to 12-minute episodes. YouTube renewed Buddy System for a second season, and the duo is planning to push things even further, with episodes that run 22 minutes or more, which is the length of a traditional TV sitcom.
But even as they move into season 2, the pair stresses that, for them at least, this still feels like a transitionary period. “It is still an exercise in converting our Good Mythical Morning audience to being Red subscribers,” says Link. “The challenge is getting that audience to think about content in a different way, how do they consume it, are they willing to pay for it? That’s the big hurdle. They have gotten this free their entire life,” says Rhett.
If shows like Rhett and Link’s are working, why is YouTube spending big bucks to court established celebrities? Well, many of those originals will be available to non-Red subscribers too. Joshua Cohen, who covers the online video industry as editor-in-chief of TubeFilter, says the extra expense is justified as YouTube goes after marketing money that was once spent on traditional broadcast television. “A lot of the people who control the purse strings at these advertising agencies and brands, they know who Katy Perry is, they know who Demi Lovato is, it’s an easier yes than having to educate them about a personality they have never heard about before.”
Daniels is quick to point out, however, that while they are working with more mainstream stars like Perry, they are still leveraging YouTube’s unique platform. Perry’s three-day live stream, “Witness World Wide,” was filmed by 41 robotic cameras throughout the space. While watching from Katy’s YouTube channel, fans could view from one of five camera angles at any given moment. Broadcast television doesn’t typically devote airtime to celebrities sleeping in bed, but a massive audience tuned in to watch Perry catch some winks live on YouTube, with over 49 million views clocked during the event.
Of course, pumping hundreds of millions into the production and marketing of originals for big YouTube stars and Hollywood celebrities puts YouTube into competition with smaller-scale creators. “The odds are more against [those creators] than they were 10 years ago, when just a handful of people thought this was worth getting into,” says Rhett. Cohen agrees that the increase in originals makes it harder for new megastars to emerge organically. That being said, “There are way more people making a living on YouTube than ever before.”
For all the talk of taking a bite out of television, investing in more ambitious projects is also a defensive strategy for YouTube. As Facebook, Snapchat, and others begin spending heavily on their own originals, Red is “definitely an internal marketing tactic that allows YouTube to strengthen relationships with its top talent,” says Cohen. YouTube stars are paying close attention. Swoozie, a vlogger with just shy of 5 million subscribers, announced at VidCon today that he’ll be hosting a Red original called Laced Up. It’s a sneaker-design competition produced by Ken Mok, the brains behind countless seasons of America’s Next Top Model.
In an interview with The Verge, Swoozie talked about how excited he was for the opportunity to host an original, and how impressed he was by the quality of the production. But he also kept his eye on how the company treated its stars off set. “I was watching very carefully. They guy who picked me up for the airport came in a $ 100,000 Mercedes. They did not skimp on the smallest little detail.”
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