Don't think YouTube is any less serious about becoming your next favorite TV channel. Sure, it's slashing the number of Web shows it's funding, but that only means it's sharpening its focus. 2013 is going to be another big year for premium-TV-style video on the Web.
YouTube execs said in January they would spend $100 million on premium video content, joining Hulu and Netflix in their effort to make online programming look a lot more like the stuff we turn to networks and cable channels to watch. Now, YouTube will funding only about 40% of that original raft of shows, according to AllThingsD.
Winners And Losers
The company hasn't revealed which shows are getting the ax. That will be made clear as deals are renewed. So how is Google, YouTube's parent, deciding? Advertisers want to see engagement, which means Google also wants to see engagement, including how long people watch.
Google's prime motivation in YouTube is attracting advertisers, just like it is with the company's mainstay search services. If it can change the TV landscape in the process, that's great. Just like a traditional network, Google is not going to wait around for shows to pay off. Unlike with the old gaurd, those that don't make the cut can keep going. Just not on Google's dime.
The culling starts now, and the shows with the highest potential will reap further Google investment as the company grows beyond search ads. Focusing on successes helps make YouTube an alternative to traditional television, and gives a Google a more competitive position from which to negotiate with big content providers.
The Louis C.K. Factor
For evidence of the power of the Web in video content distribution, look no further than edgy comedian Louis C.K (right). By now, most of us know how he used the Web to change how show tickets and videos are sold via the Internet, demonstrating a new model.
As it happens, C.K.'s next comedy special will air first on HBO and, a few months later, it will be sold directly to fans in a manner of his choosing. This, as Peter Kafka points out, is a major departure for HBO, which typically makes content available exclusively to its 30 million subscribers, no ifs, ands, or buts. It's interesting to see the premium cable channel loosen its grip.
Another Big Year For Premium Web Video?
Next year should be another big one for premium Web video. There's little reason to doubt that Netflix and Hulu will join YouTube in making further investments in TV-quality content. And we already know 2013 will have an interesting case study -- and potentially a watershed moment for online TV -- when Arrested Development returns exclusively online. The cult-hit comedy was canceled by Fox in 2005, and will become the first TV show of its stature to be revived online.
The old video model is still strong. Over 90% of American households subscribe to a traditional pay-TV service, according to ratings firm The Nielsen Co. The number of cord-cutters is growing, but not at a rate that will threaten cable soon. That may change as Web TV evolves, a process Google and others are trying to force right now.