YouTube's Original Content: A Bold Move, A Bigger Misstep

YouTube, the world's biggest video platform, once tried to compete with streaming giants like Netflix by creating its own original shows. This wasn't the first time YouTube had dipped its toes into original content. They had previously tried to fund original content with the YouTube Original Channels initiative in 2012. This initiative gave out $100 million to dozens of channels from partners including Madonna, Jay-Z, Amy Poehler, Sofia Vergara, Shaquille O’Neal and WWE. In addition, Google pledged $200 million more to market them. The idea was to boost homegrown creators by funding big productions. This was a big deal because YouTube wanted to share in the success of these creators. However, things didn't go as planned. The creators themselves started making high-quality content without YouTube's help. This meant YouTube didn't need to fund these projects anymore. YouTube's original content strategy didn't work because they weren't good at picking content. As a technology platform, YouTube is good at building tools for creators and viewing experiences for viewers. So YouTube decided to focus on that. YouTube's shift away from original content raises an interesting question: Does traditional studio-produced content yield better economics for creators and platforms? Netflix's subscription-based model "generates higher returns for creators" compared with YouTube, Netflix co-CEO Ted Sarandos claimed on the company’s Q3 earnings interview in October 2024. But in general, there’s money to be made via either user-generated content or professionally produced content. The key success factor is having broad scale. The benefit of YouTube’s UGC model, is the platform doesn’t have to fork out cash for content upfront. Rather, it pays out ad revenue based on how popular videos are. "It’s a no-risk model, " says Scott Purdy, U. S. media industry leader at KPMG. YouTube's original content journey started in 2015 when they hired TV veteran Susanne Daniels to build a slate of original programming. This programming was available exclusively to subscribers of YouTube Red, later rebranded as YouTube Premium. Daniels, who had been MTV’s head of programming and a top exec at the WB and Lifetime, led the team that greenlit series featuring YouTube creators like PewDiePie, Markiplier, Rhett & Link and Liza Koshy, as well as scripted originals like “Karate Kid” offshoot “Cobra Kai. ”However, the originals were not delivering the payback YouTube execs anticipated via subscriptions. The platform shifted to make YouTube Originals available for free with ads, an attempt to better monetize them. In 2019, YouTube started to exit the scripted game to focus on unscripted fare. Some of its popular series found homes elsewhere: In 2020 “Cobra Kai, ” from Sony Pictures Television, was picked up after two seasons on YouTube by Netflix. “Step Up, ” based on the film series, lived on YouTube for two seasons and moved to Starz for a third and final season. In early 2022, YouTube wound down the originals initiative altogether. Daniels left YouTube that spring. Neal Mohan, who became YouTube’s CEO in February 2023, says the one-time thesis was that the platform could give a boost to homegrown creators by financing bigger-ticket productions. What happened, he says, is that popular YouTubers organically began producing premium-level content that was as good as anything on TV or other streaming services. Big creators on YouTube “are the new Hollywood in that sense because they are producing the content that people want to watch, ” Mohan says. “And so that eliminated the need for us to do anything in that regard because our creators were doing it on their own. ” YouTube's journey into original content is a tale of ambition and adaptation. It shows how a platform can pivot and evolve based on the changing landscape of content creation. The lessons learned from this experience can help shape the future of digital media. The key takeaway is that while funding original content can be risky, the rise of user-generated content offers a more sustainable model. This model allows platforms to support creators without the upfront costs of traditional production. It also highlights the importance of understanding the strengths and weaknesses of a platform. YouTube's focus on technology and user experience has proven to be a winning strategy. This approach allows the platform to thrive in the ever-changing world of digital media. YouTube's original content initiative was a bold move, but it ultimately proved to be a misstep. The platform's pivot to user-generated content shows that sometimes, the best strategy is to let creators do what they do best. By focusing on technology and user experience, YouTube has found a way to support creators without the risks of traditional production. This approach has allowed the platform to thrive in the ever-changing world of digital media. The lessons learned from this experience can help shape the future of digital media. The key takeaway is that while funding original content can be risky, the rise of user-generated content offers a more sustainable model. This model allows platforms to support creators without the upfront costs of traditional production.