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October 04, 2011

YouTube Invests $100 Million to Bring Original Content to the Small Screen: Report

By Beecher Tuttle, TMCnet Contributor

Comcast (News - Alert) and Time Warner beware. Web giant Google is said to be wrapping up deals with major media companies to develop original, professional-grade content for YouTube (News - Alert), the Wall Street Journal reports.



Sources close to the situation told the paper that Google (News - Alert) will offer up to $100 million in cash advances for content providers to build free online channels that will be monetized through advertising. The hope is that the new initiative persuades advertisers to treat YouTube as if it was a traditional marketing medium, and invest accordingly.

Google has reportedly already inked deals or is close to partnering with media companies like Warner Bros., “The X Factor” producer FremantleMedia Ltd. and News Corp (News - Alert).'s ShineReveille unit, maker of “Ugly Betty” and other popular network shows. Celebrities like Tony Hawk have also signed on to produce original content for the world's top video-sharing site.

As a Google-owned business unit, YouTube has been characteristically tight-lipped about the situation, telling the Journal that it doesn't comment on speculation, but are “always talking to content creators and curators of all kinds about building audiences on YouTube.”

If the report is accurate – which one can probably assume considering News. Corp owns the Journal – cable and satellite providers will be forced to face yet another online rival looking to convince consumers to “cut the cord” all together. Streaming sites like Netflix and Hulu (News - Alert) – and the launch of new sites from Amazon and Dish Network – have already painted traditional service providers in a corner.

The rising adoption rates of tablet devices and set-top boxes make the timing right for YouTube, which is expected to launch the channels in at some point within the next year. With 600 million unique visitors each month, YouTube can make a killing if it is able to convince advertisers that it can compete with networks as a viable medium.

The video-sharing site is already on pace to generate around $1 billion in revenue this year without bringing in big ad dollars that are earmarked for television.




Beecher Tuttle is a TMCnet contributor. He has extensive experience writing and editing for print publications and online news websites. He has specialized in a variety of industries, including health care technology, politics and education. To read more of his articles, please visit his columnist page.

Edited by Jennifer Russell

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