YouTube has had enough of the high costs associated with creating original shows and is now in the process of winding down that side of its business.
This is based on a new report which in turn credits “people with knowledge of the matter” for the information. The details have yet to be officially confirmed by Google or YouTube.
Although the suggestion here is YouTube is now completely done with big budget shows, this is not exactly unexpected. While the company has released a number of high-profile shows recently, indications had already surfaced suggesting YouTube was not seeing the sort of return on investment it might have originally expected.
In early 2018, reports came through stating YouTube was pausing investment growth in this sector until 2020.
Within a year, that pausing has now become more of a stopping of investment altogether.
According to the latest report, not only is YouTube not renewing any costly-to-make shows, but it is also no longer accepting premium show script submissions.
The sci-fi “Origin” series and the comedy-based "Overthinking with Kat & June" are two of the current YouTube shows that are now understood to have also been canceled.
As part of the scaling back process, most of the YouTube “Originals” that are currently only accessible to Premium (Red) subscribers, will eventually be migrated over to the free side of the service.
YouTube Red itself is expected to continue to be a thing, although its focus will continue to be on music.
This is not only a major change in YouTube’s premium content direction but also one that seems to go against the grain in general. Most services that deal with video content are actively looking to create original programming as a means to differentiate themselves from the rest.
By far, this has been most evident at the Netflix and Amazon level with the two constantly battling through the wide number of original shows each service releases each year. In Netflix’s case, this seems to be the company’s main direction going forward as it looks to lessen its dependency on third-party content altogether.
For YouTube, however, it just does not seem to have worked out. That’s not to say YouTube does not have the financial backing to make it work, but more so the motivation is not quite there like it is with Netflix or some of the other companies.
Although these shows are pegged as original content, the YouTube ecosystem as a whole is one which serves up original content, and successfully.
Porting its main Originals over to the free side where it can gain significantly more views (and generate more ad revenue) makes sense. As does its focus on building shows around the stars the platform has already created, instead of following the Netflix and Amazon model by recruiting Hollywood names to add value to a show.
YouTube has always been a completely different proposition to other third-party video services and it seems like YouTube now intends to continue to focus on what it already does well, instead of continuing to pump money into a sector that’s likely going to require escalating levels of investment over the next few years just to stay relevant.