Forget going to Europe — how about giving us more money?
That’s the message from several U.S. partner channels involved in YouTube’s premium content initiative, responding to reports in the Wall Street Journal Tuesday that Google-owned YouTube plans to expand the initiative to the U.K. and France.
“We’re not really funded enough to win,” griped the operator of one Los Angeles-based YouTube channel, who spoke to us on the condition his name not be mentioned for fear of alienating his powerful production partner.
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According to this executive, the funding his company received from Google allows it to spend about $ 1,000 a minute on each video production made for its channel.
“But $ 1,000 a finished minute is not enough,” he explained. “You need to get to around $ 2,100. At $ 1,000 a minute, you’re pulling favors every time you do a shoot. If you’re just pulling a location permit in L.A., it’s going to cost you $ 900.”
YouTube is eight months into an ambitious plan to siphon away some of traditional TV’s ad base by seeding the market with “premium” channels — i.e. operations backed by pros — who, unlike teenagers in bedrooms, will reliably produce advertiser-safe content.
A YouTube spokesman noted that beyond the $ 150 million investment in premium content, the company is also committing $ 200 million to support its channel partners with marketing and promoting their programs.
“We are committed to helping all of our partners grow and that’s why we’re investing $ 200 million in the coming months to market great partner content on YouTube,” he said. “The broader goal with original channels is to accelerate the growth and velocity of all the great partner content coming to YouTube. We’re seeing this happen now.”
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As neatly outlined in Tuesday’s WSJ report, the company has spent around $ 150 million to date to fund nearly 100 distinct channels in the U.S. — a sum the WSJ reports has already been offset by ad sales. YouTube will spend another $ 200 million to market these channels.
YouTube hasn’t commented publicly on the details of its European investment, but insiders say streaming video opportunities in the region — which are also being pursued by other digital companies like Netflix — are too good to pass up.
Before the paper reported Google’s plans for European expansion, one channel operator we spoke with wondered if the initiative was spread too thin within just the U.S.
“Maybe Google is smarter than me, but if they launched 60 channels instead of 100, maybe that works out better.”
The Google spokesman noted that usage is up significantly year over year. According to comScore video data for June, unique viewers on Google’s video channels had increaed year over year to 154.5 million from 149.3 million. Average time spent viewing Google video per viewer was up to 484.4 minutes per month vs. 324.1 in June 2011.
