Changing Channels: YouTube Will Pull the Plug on at Least 60 Percent of Its Programming Deals
YouTube has helped fund about 160 “channels” as part of a new strategy to make the video site more TV-like. — And just like the TV world, YouTube isn't going to renew all of last season's programs.
Context & Ripple Effects
The cull closes a loop opened in April 2011, when Google announced its revamp of YouTube around 'Channels' and began bankrolling roughly 160 professionally produced channels to make the site more TV-like. A day before this report, AdAge had flagged an unconfirmed plan for another big round of content investments; instead, YouTube is confirming it will not renew at least 60 percent of those programming deals.
The pickup was broad — Associated Press, TechCrunch and Mashable all carried the story on or about November 12, 2012 — which matters because the funded-channel experiment was YouTube's most expensive bid yet for premium advertising budgets, following years in which traditional media treated the platform warily, as when NBC pulled its channel from YouTube back in 2007.
First-order effects
- Roughly 100 of the ~160 funded channel partners lose their YouTube checks at renewal, forcing production companies built on that advance money to find outside financing or shut down.
- The partners that survive keep funding only where they have demonstrated audience retention, not simply because they were part of the original slate.
Second-order effects
- Media companies weighing YouTube as a distribution partner now price it as a performance market rather than a development fund, shifting negotiating leverage toward whoever owns shows that already hold viewers.
- YouTube's own ad sales pitch tilts toward proven watch-time inventory, consistent with its confirmed October shift to ranking videos by time spent watching rather than clicks.
Third-order effects
- If the pattern holds, platform-funded originals become a tournament structure — broad seed funding followed by ruthless renewal decisions based on retention data — rather than a standing subsidy for professional video.
- That pushes the industry toward a model where the platform's measurement system, not upfront commissions, decides which producers get paid, reshaping how studios approach any large video platform.
The trend: Video platforms are moving from blanket commissioning of TV-style originals to retention-driven funding, letting viewer data decide which professional productions survive.