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Starz: Why Creating Original Online Videos Is a Smart Move

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At the recent Streaming Media East conference in New York City, David Katz, vice president of digital media for Starz, sat down for a sit-down interview to explain why a premium pay TV service is putting videos online. The Starz strategy is to use YouTube not just to promote its existing series, but to develop new ideas as well, such as "Llama Cop."

Rather than taking a walled garden approach, Starz sees YouTube as an important way to reach viewers.

"This line is getting blurred," Katz explains. "Shows that are premium on the network might use YouTube talent and vice-versa, so maybe we'll have an opportunity to pull some talent from the shows and have them help the YouTube channel. I think what we're trying to do as a digital group within the network is embrace all these different media, and be smart about the different ways that each one works and the advantages and disadvantages of all of them."

When creating online video that supports a brand, remember that viewers have to want to watch it, and then want to share it with their friends. Online video needs to be just as compelling as TV content. Many of the biggest brands around are embracing their new role as production studio.

"Brands like Red Bull and Mercedes and American Express and BMW, these are brands that have really embraced content creation, and I think that's key," Katz says. "The YouTube audience wants to be entertained, and part of what [YouTube is] doing with TrueView is saying to the sponsors and the brands and the advertisers, 'You have to make an ad that people are going to want to watch. They're going to want to opt in to watch it. It has to be a piece of entertainment, it has to be engaging.' I think that's really a compelling message."

For more on creating branded entertainment for YouTube, watch the full video below.

 

  

Troy:  Hi. This is Troy Dreier, Senior Associate Editor for Streaming Media, coming to you Almost Live from Streaming Media East 2014 in New York City. I'm joined today with David Katz, VP of Digital for the Starz Network.

David:  Hello.

Troy:  And you were just on a panel about YouTube and branding and marketing, which is kind of an anomaly here. We don't get a lot of that kind of talk. But I'm really curious what you guys are doing on YouTube. I mean, you have your own platforms for distributing video. And yet, YouTube is very important to you. Tell us about the Starz YouTube strategy.

David:  So we use YouTube in a variety of different ways. We are a digital distributor and so we have a lot of content that goes out to a bunch of different partners. And YouTube is unique in that it can be, both, a marketing platform and a monetization platform. And it's also unique in that it has, both, ad supported and transactional and subscription capabilities for users to interact with content. So you have a lot of different ways to touch your audience. On the marketing side, we use YouTube to promote our shows that are going on network, like some of our new shows, like "Power" or "Black Sails," or "Outlander." We'll post clips or exclusive videos on the channel to our Starz YouTube channel. So people can interact with the content and share it and get excited about the shows that are coming up. We also work with other NCN's, like Machinima, to help release an episode, say, of a first series of a new season that might be coming out, or try to generate awareness to the show. On the flip side, we publish complete episodes of series. Not necessarily the stuff that goes on our channel, but other content. Things that we might have on our home video label. Like, we have a lot of anime in our anime library. And so anime does really well. Japanese anime does really well on YouTube. And so we have a channel called Manga Entertainment, which publishes anime on YouTube. And that is an interesting model for us, because there we're actually going with the ad supported model, which has a premium cable network. It's not something that we're used to doing. But, you know, it's an interesting way to try to get involved with the YouTube audience. And then, when we look at how that performs and we see that sometimes the audience isn't reacting as well to a full 22-minute episode on YouTube, we realize that sometimes you have to engage the YouTube audience the way that they're used to being engaged. And so we're also investing in creating content that is endemic to YouTube, that's special just for that audience. And so we've created a channel call "How it should've ended," which is funny ways that movies could've ended. You should go check it out, if you haven't already. I think they're up to, like, 3.4 million subscribers. It's a very popular channel. And we created a new channel called "Union Pool," to draft off of the success of "How it should've ended." And that channel has, you know, funny parodies, movie parodies. So we have a show called "Tavovies," which is a TV show and movie stuck together. So, like, "Jurassic Parks and Rec" or "Mad X-Men." You know, try to put those two together and sort of find a funny way to parody both of those properties. And then, we have some original content. Like, we just launched a show called "Llama Cop," which is what it sounds like. It's a live action show that is a cop buddy, you know, action drama. And one of the cops is a llama. And so you should definitely go check that out, too. So we have this really interesting relationship with YouTube, as I said, where we have our marketing there. We have our full length content that's there. We have content that's not on our network, but that we own and we monetize through ad supported. And then, we have this content that we're producing just for YouTube, which, you know, we find engages the audience in a completely different way. We also use Google Play as a transactional platform. And so we're selling content. About the only thing we're not doing is subscription, just because you have to have a huge subscriber base in order to work that well. And we just find that we're not quite there, yet.

Troy:  So you're creating original content for YouTube. How does that help a premium movie network to have original content on this video platform?

David:  Well, I think it helps because, as the digital guy at Starz, it's important for me to understand how all these platforms work. And we need to embrace all these different platforms. So, for instance, we just announced a new show on the network called "The Chair," where we have two directors who are going to be working off of the same script to make the same movie. And one of them is Shane Dawson, who is a YouTuber. And so, you know, this line is getting blurred; right? And, you know, shows that are premium on the network might use YouTube talent, and vice versa. And so maybe we'll have an opportunity to pool some talent from the shows and have them help the YouTube channel. So I think what we're trying to do, as a digital group within the network, is embrace all these different media. And be smart about the different ways that each one works and the advantages and disadvantages of all of them. So if we just used YouTube as a marketing platform, I feel like we wouldn't understand really how the monetization piece works. And that's really important to us, as a group that monetizes content. We need to understand that. And so by creating content that's original and endemic to YouTube, we start to get a better understanding of how that works. And then, we can start to extend that strategy into our other full length content and bring it to YouTube in a smarter way.

Troy:  So when you are promoting, like, a second season of a show on YouTube and you're putting clips up, what are your campaign goals? And how do you measure those specific goals?

David:  So first, I should be totally honest. We have a crack digital marketing team, of which I am not a member. So Erin Dwyer on our team is awesome at that. And she uses all of the social and viral tools at her disposal to try to drive awareness of the show. And so one of the things she might do is, when a second season is about to air, she might make the first episode of that season available for free on YouTube. So people can go, who aren't subscribers to Starz, and watch it. Metrics like engagement, watch time, views, obviously, subscribers to the channel. So what we're really trying to do is engage the audience around that content. And the challenge is that, you know, people aren't necessarily fans of a network as much as they are fans of a show. And so, you know, you're incented to create a "Spartacus" YouTube channel, where all the "Spartacus" fans can gather. But the truth is what you'd really rather have is a Starz YouTube channel, where you can cross-pollinate. And so, you know, that's some of the challenges, how do you take the different shows that we have and the different audiences that are going to aggregate around those shows, and move them around and make the most of their affinity with the brand.

Troy:  YouTube is so incredibly vast and so crazy big. How can brands stand out when they create their own branded entertainment videos?

David:  It's very difficult. And I think part of the question you asked earlier about why do we create content for YouTube and monetize it on YouTube is to understand some of these tricks of the trade. So I think, you know, brands like Red Bull and, you know, Mercedes and American Express, and BMW, I mean, these are brands that have really embraced content creation. And I think that's key. You know, the YouTube audience wants to be entertained. And part of what they're doing with TrueView is saying to the sponsors and the brands and the advertisers, "You have to make that an ad that people are going to want to watch, they're going to want to opt in to watch it. It has to be a piece of entertainment. It has to be engaging." And I think that's a really compelling message. And I think, you know, as a brand, to be able to affiliate yourself with a YouTube talent that's already got a massive audience on the channel is very compelling. Or going out and building your own compelling set of content. And then, you change from being a brand that's advertising and sending out a message to someone that's trying to create content. And advertiser as content creator, I think is the new way that this really-- YouTube is trying to embrace this. And Red Bull has done a great job of showing how you can be a brand and a content creator at the same time. And so you have to be able to engage with the audience. You have to be authentic. You have to be able to be comfortable giving up a little bit of control and allowing your audience to come in and engage with the brand and show how they're fans. And that may not necessarily be on message as much as you want, but it's something that you need to be able to do on the platform. Because it's a very interactive platform and people expect to be able to interact with you.

Troy:  Now, you were just speaking in a panel on YouTube brand success. One of the topics that came up at the end was Google Preferred, something that was just introduced at the Google Brand Cast event-- YouTube Brand Cast event, that they just had a couple of weeks ago here in New York. So it's the top 5 percent of YouTube's channels and key verticals. And this is a sales tool; right? That they're using for TV advertisers?

David:  Yeah.

Troy:  Tell us about it. What is this and why is it effective?

David:  I think, as a premium content provider that has struggled to monetize content well on YouTube, this is something that's really exciting to us. Because I think what they're saying here is, "We get it. We want to talk to the people who are making the decisions about how the media gets spent in a way that they're used to be talked to." And so at the Brand Cast event that you're referring to recently, they made a couple of announcements. And one is that they're going to create this Google Preferred, which is a safe place to buy media on Google. And I think that's really important on YouTube. Because brands are a little hesitant. There's a lot of risk, you know, seeing and buying on YouTube. And so while that perception is changing, the creation of this sort of safe area, and this is the premium content, this is the good stuff. Which I think, historically, they've been very hesitant to do because they say it's all good stuff, you know. We don't want to have to make that decision. We want people to be able to, you know, arrive at their own conclusions and have their own experiences on YouTube. So creating a safe place for brands to buy. The second thing is measurement. So they're partnering with Nielson and Comscore to be able to measure effectively the media that you're spending. And I think they're trying to put themselves on equal footing with TV, which is really important. And I think the third piece is, I think it's audience guarantee. They're going to say, "You know, look. If you buy a certain amount of audience, we will guarantee you that you get there, for the money that you spent." And so I think what they're doing here is they're saying, "Look. We're going to remove the hesitations and the doubts and the questions that you have. We want you to embrace this as a medium. You aren't going to be able to connect with millenial's, with kids 12 to 15 to, you know, 18 to 34. This is where they are. And if you want to connect with them, you have to come here. We're going to make it easier for you to spend the money. And so as a premium content producer, you know, struggling to monetize, the promise with this new announcement is that my monetization is going to go up. That my content, which I'm spending so much to produce, is going to get folded into that Google Preferred area. And then, I'm going to monetize better and it's going to be a more rewarding experience for me, as a content producer. And then, I'm going to want to double down and invest more and produce more and bring more content to YouTube. So I think it's great. We're super enthusiastic about it. We just hope that it works.

Troy:  Is the audience of that top 5 percent a better audience to be in front of?

David:  I don't think so. I don't think that's what they're saying. I think what they're saying is that this is a safe place to buy content. That the content that you're going to be associated with is going to be premium. The audience, I think they would argue, is sort of similar to the people that are watching the rest of the content. I don't think there's a separate class of people that are connecting with Google Preferred. I do think that those are the largest audiences. And those are the people that are very comfortable integrating brands into their conversations with their fans. And so I think what you're ending up seeing there is, you know, creators like Michelle Phan, who have this beauty network that amassed these subscribers, who are very comfortable with working with a brand like L'Oreal. You know, you're going to get a better experience as a brand buying into that than, perhaps, somebody else who might not be as on message, might not be as safe. You know, you might not get the, sort of, promise of quality that you would get with a Google Preferred provider. But I think, you know, one of the things that came up in the panel was a smart brand and a smart media planner is going to embrace both. There's going to be a time when Google Preferred is the right tool to use. And there's going to be a time when you want to just go out there and cast a wide net and really see what works. And so we think that people are going to embrace both of these. And it's so smart that Google is creating this scarcity. But, you know, there's so much to be gained from using the entire network as a way to drive, you know, reach and scale in a way that just isn't possible on other platforms.

Troy:  At the event where Google Preferred was introduced, they kept driving home the idea that this was incredibly scarce inventory. And each time, the people in the audience laughed.

David:  Right.

Troy:  Each time. Like, what's 5 percent of infinity?

David:  Right.

Troy:  Is it really scarce?

David:  It has to be. Like, that's just a simple answer. It has to be. They have to create that scarcity because that's how you drive value. If it's just infinite amount of views, then there is no scarcity and there's no premium to be charged. So you have to create scarcity. I don't know how they're going to do that. But they need to be able to do it. If they can't, then I don't think it will work as well.

Troy:  Well, David, thank you so much for joining me. This is Troy Dreier coming to you from Streaming Media East, Almost Live.

David:  Thanks for having me. 

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