Selling Both Sides Of The Aisle Everybody Wins

Michael Hedges October 11, 2012 Follow on Twitter

Whether they’re hawking airplanes, air-hammers or television shows, good salespeople love nothing more than having new customers to pitch. New buyers often arrive without the bias of tradition and carrying bags of money. In this converged digital world, the threshold between content and distribution blurring, successful selling requires a special language.

Google rang the opening bell, so to speak, at the Mipcom TV market announcing (October 7) its YouTube video portal is adding 60 European channels, all with original content. YouTube launched 100 channels last year for original production in North America. Somehow, the buzz about the European channels seems even bigger.

Mipcom is the annual marketplace for video content, formerly known as TV shows, held at the pleasantly chic French Riviera village of Cannes. Not long ago production house salespeople whiled away the hours folding paper airplanes before the evening parties started. Traditional TV buyers stayed away – or kept a firm hold on their cash – as the Great Recession gripped program budgets. New customers, mostly telecoms, just circled, not quite convinced what this non-traditional television should be…or cost. That was then.

Google has lined up major UK, German and French production houses to produce the new round of original channels, 30 of the proposed 60 channels recently identified. Amateur hour is definitely over. Big Brother creator Endemol will offer The Short Movie Channel and Survival Guide for Parents in Germany as well as an interactive celebrity channel in France. From RTL’s Fremantle production house will be the Heartbeat Berlin channel.

BBC Worldwide will produce three of the new YouTube channels, offering “originated content,” including The Topic Science Channel. ITN Productions, All3Media and Shine Group will all contribute. Shine Group is owned by News Corporation, whose chairman Rupert Murdoch once referred to YouTube owner Google as a “parasite.” This past summer Shine CEO Elisabeth Murdoch revealed a more nuanced view, saying “YouTube is now beginning to behave like a market leader.” Shine’s US division sells programming to another web TV aggregator, Netflix.

The European YouTube channels will engage viewers with cooking channels, comedy channels, automobile channels, sports channels, music channels and more. French-based news broadcaster Euronews, largely supported by public broadcasters, will produce a long-form news channel called Euronews Knowledge. The ITN Productions offering Truthloader will focus on eyewitness reporting from citizen journalists. Separately, Turner Broadcasting’s CNN announced it’s firing up CNN Films, which will buy and occasionally produce documentaries.

All in all, the new YouTube channels seem just like cable TV, not so bad recognizing that the US cable guys (think HBO and others) have been successfully offering original programming for more than a decade. Ad revenue will be split between producers and Google after front money is recovered, Google stumping up about US$200 million. Producers keep rights to all but YouTube holds exclusive rights to films for a year.

“Audiences are rapidly changing and if you want to keep up with them you have to program on YouTube,” said Google/YouTube global head of content and partnerships Robert Kyncl to the rapt Mipcom audience.

It is, of course, an advertising strategy, something Google people have reinvented to the joy of some and pain of others. Web technology, something Google people have defined, will allow advertisers greater flexibility. “When advertisers pay only when ads are watched, and when viewers are watching only the ads that they care about, advertisers pay more,” explained Mr. Kyncl in Cannes. “And they don’t mind. That means that content creators are making more. Everybody wins.”

Not everybody is completely on board. “I have my doubts,” said BSkyB COO Mike Darcey, quoted by Bloomberg (October 10), questioning whether or not Google and other web TV aggregators “can sustain at a high level in terms of volume and quality.” Traditional television networks said the same about the cable guys once upon a time.

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