YouTube has put up more than $100 million in cash advances to create new content for its popular video site. It asked Hollywood industry insiders to pitch content ideas, and received more than 150 pitches before choosing over a dozen to fund. The producers behind well known shows like “Ugly Betty,” “The X Factor,” and “Mob Wives” are expected to be among the partners.
YouTube will recoup the costs with advertising, and will then split ad revenue with the partners. Digital advertising is expected to take up a full third of the global advertising spend ($578 billion) by 2015, and Google, owners of YouTube, are experts at targeted digital advertising. With the shift of viewers from television to internet video, and the rise of cable set-top boxes that will let viewers watch online video in their living rooms, YouTube is positioning itself to be a content owner. Current spending on broadcast and cable ads is about $60 billion per year, and YouTube hopes some of that will shift to internet video.
YouTube expects to roll out their channels in 2012.