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YouTube to pull funding for 60% of original channnels

The Internet’s leading video site YouTube will be axing 60 per cent of its original content a year after the launch of the “professional channels initiative”, it has been reported.

According to a report by Ad Age, the video site will now only fund 30 to 40 per cent of its initial 160 channel partners. The new channel roster will also be incorporating European programming as producers from the UK, France and Germany have been contracted to create content.

YouTube made an investment of $100 million (£63 million) back in December 2011 to establish a range of professionally produced channels. The production of original content represented a bid to create a comparable service to YouTube’s video-on-demand competitors like Netflix, iPlayer and LoveFilm.

“Our biggest objective was to kick-start the ecosystem, to bring in great creators, to deepen our relationships with advertisers and to grow viewership,” said global head of content, Jamie Byrne.

The investment was not free capital however, as it was an upfront payment of a year's worth of advertising revenues. Therefore each channel was required to recoup the money via attached advertising - if not, YouTube would be operating said channel at a loss. This need to cut costs has compelled Google’s video service to narrow its focus on channels that can best regain their upfront funding.

"We looked at viewership they've been able to achieve, the cost of the content, and from that we are able to determine the channels that are delivering the best return on our investment," said Byrne.

The top 25 channels brought an average of a million views per week, with the 33 most viewed channels earning 100,000 subscriptions.

Content providers that are in line for further funding will be contacted in the coming weeks and can reportedly expect a cash injection of $1-5 million (£630,000 - £3 million).