Report: YouTube to Spend $100 Million on Original Programs for New Channels

YouTube is reportedly ready to spend $100 million to develop original ad-supported programming to populate about 20 new niche “channels,” according to a Wall Street Journal report.

YouTube will reportedly:

• Spend up to $100 million on “low-cost content designed exclusively for the web.”
• Change its home page to highlight “about 20 or so” niche channels (e.g., sports, arts) comprised of this original programming.
• Assemble more channels from existing content.
• Integrate new social networking features to help users identify video popular video content (on a seemingly related social note: in a move to consolidate user information, YouTube recently forced users to connect their accounts to Google accounts).

Changes will be phased in starting before the end of this year. Seems some of those 200 open jobs at YouTube will be to work on this project.

The report also noted that Google has met with various Hollywood talent agencies and is also pushing to acquire more TV shows and movies to compete with sites like Hulu and Netflix. YouTube is still negotiating to add Miramax films for a reported price of $100 million. Movies and TV shows became a YouTube offering in 2009.

The WSJ report is mostly speculative, based on “people familiar with the matter,” but it seems to have some validity based on comments made by YouTube CEO Salar Kamangar in a Q&A last month. In that interview, Kamangar discussed how YouTube could have the same impact on video delivery as cable had on broadcast television.

“What’s amazing is that the Web enables you to build a kind of channel that wouldn’t have made sense for cable, in the same way cable enabled you to build content that wouldn’t have made sense for broadcast. You couldn’t have done CNN with the broadcast networks; you couldn’t have done MTV with the broadcast networks.”

Combine this with last month’s acquisitions of video producer Next New Networks, a company that produced two of YouTube’s most popular videos of 2010, as well as Green Parrot Pictures to improve video quality and playback speed, the creation of the YouTube Creator Institute by YouTube Next, and the pieces are all falling into place for this new YouTube.

In related news, Google’s entertainment division this year will move to Beverly Hills after signing an 11-year, $6.3 million lease to build up its presences in the Los Angeles area. The 13,000-square-foot office will house YouTube and Google employees.

What do you think? Will people eventually watch YouTube the way they watch TV now?