YouTube To Cut 60 Percent of Premium Channels

 

It's been more than a year since YouTube gave millions of dollars to 100 or so established content creators such as BermanBraun, the Wall Street Journal, Ashton Kutcher, Amy Poehler and CSI creator Anthony Zuiker.

This week, YouTube and its parent Google will decide which of those partners deserve more money and which do not.

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Insiders said that YouTube is set to release about 60 percent of its early crop of premium channels due to underperformance, though it is not expected to announce which ones make the cut and which do not. The channels won't go away, but YouTube will stop bankrolling them.

From YouTube’s perspective, in fact, it would be great if the abandoned channels thrive -- so that they can pay back the money the online video giant advanced them. Under the terms of the original deal, YouTube advanced each channel about $1 million at the low end or as much as $5 million at the high end, and ad revenue the channels generated goes to YouTube until the loans are paid off. Afterward, the revenue would be split between YouTube and the channels' operators.

Insiders said that YouTube will compare total “watch time” with cost in order to determine which programmers have been making efficient use of their budgets. Those that don’t measure up won’t get more money or a new contract.

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One entity that appears to be holding its own is BermanBraun, which launched a third YouTube-backed premium channel last week called CineFix, dedicated to film buffs. It previously launched fitness channel 3V and food channel Tasted. The studio’s head of unscripted television and digital video Chris Cowan told The Hollywood Reporter it will be “some time” before YouTube and BermanBraun turn a profit with their partnership.

“The whole premium-channel experience is a bit of an experiment,” Cowan said last week.

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