CES Report: YouTube and the Power of Programming

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Almost a decade after it launched, YouTube has become the go-to destination for video content for millennials and younger generations, but the platform and its creators are still learning how to make money from it, even as old-guard media properties are learning from YouTube.

"YouTube is the ultimate get-rich-slow platform," joked Phil Ranta, VP, talent operations for Fullscreen, during a Digital Hollywood panel today at the 2015 International Consumer Electronics Show called "YouTube: Unlocking the Power of Programming." But while monetization on YouTube is elusive for most—even as a few creators are making quite a bit—the fact remains that YouTube is the dominant entertainment phenomenon of our times.

"YouTube is the most effective aggregator of audience and audience engagement of any of the social media platforms, because it is primarily entertaining video content," said Evan Weiss, senor vice president of strategic alliances for Collective Digital Studio. "Unlike CBS or even HBO, it’s not television, nor is it an MSO. You know you’re watching YouTube, and the audience is very conscious of the YouTube brand. Further, the audience is programming their experience through a search engine that’s also called YouTube. It’s a resource for traditional publishers and broadcasters, and it’s extremely important to millennials—it’s been imprinted into the millennial lifestyle."

That goes without saying, but perhaps the biggest marker of YouTube's success is that, in some cases at least, the brand is becoming secondary to the programming. "In the last year or so, the creators on YouTube have superceded what YouTube is all about," said Larry Shapiro, co-president of Big Frame. "Millennials say 'I’m going to watch YouTube' like GenXers and baby boomers say 'I’m going to watch TV.'

"Creators are getting more views than some cable shows right now. YouTube missed the boat when they went to Hollywood and asked to create content," Shapiro added, referring to YouTube's 2012 Original Channel Initiative. "Hollywood said 'OK, we'll take that money,' and most of those series failed."

That $100 million was money well-spent, though, because it "completely changed the perception of YouTube," said David Tochterman, president of Versatility Media.

"With that $100 million investment, it gave creators the sense that they could do something more, whether that ended up on YouTube or not," said Evan Bregman, head of original content for Portal A, adding that YouTubers realized they needed to up their game. "We’ve gone from a video blog that was looked down on to being an art form, with an aesthetic lexicon that you must follow."

In other words, the definition of premium content has changed, and as content creators on YouTube are becoming bigger than the channel itself, new platforms like Vessel are looking to build on those creators' success. "The challenge will be to move from video ads and AdSense to subscription revenue, and it will be interesting to see how this talent can drive their audiences off of YouTube," said Tochterman. "You can expect that the audiences will follow the talent, but will they pay to follow them? Even Maker studios, one of the biggest MCNs, has their own platform. Everyone is trying to diversify from YouTube, but without throwing the baby out with the bathwater."

The other platform poised to make the most off of the "YouTube revolution," all panelists agreed is Facebook, just based on the percentage of YouTube views that come from Facebook shares. "The role that Facebook is starting to take is YouTube's longtail," said Ranta.

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