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YouTube Takes Out Checkbook Again, Pays Its Stars to Make Videos

YouTube tried convincing people to make stuff for it a few years ago. Now it's trying again. One difference: It's going after Bethany Mota, not Madonna.

Stephen Lovekin/FilmMagic
Peter Kafka covers media and technology, and their intersection, at Vox. Many of his stories can be found in his Kafka on Media newsletter, and he also hosts the Recode Media podcast.

The world’s biggest video site is paying people to make videos. Again.

YouTube is planning to invest millions in some of its biggest stars, in deals intended to create high-quality content for the site. The deals are also designed to encourage those stars to keep working on YouTube instead of migrating to other platforms.

The plan comes a couple years after YouTube spent more than $100 million on a push to get video makers to create “channels” of programming for the site in an effort to make it more like TV.

Many of those efforts fizzled, but YouTube is taking a different approach this time: Instead of courting people from outside the YouTube ecosystem, like Madonna, it is focusing on “endemic” stars who already have big followings on the site. And it is going to pay them to create specific shows, instead of a suite of programs, and is promising to promote them to its billion-person audience.

Video producers and distributors who are discussing deals with YouTube executives say the site is talking about investing in different kinds of formats and different lengths; in some cases, YouTube is talking about pairing talent with more traditional Hollywood producers. The one constant is that they want to work with talent that is already popular on YouTube, like fashion star Bethany Mota.

YouTube has discussed spending “single-digit millions” to help fund a 10-part series, says one video producer who is talking to the company. “The idea is to help them make more ambitious projects than they can make with the money they’re making from YouTube right now.”

YouTube stars currently make money via advertising Google runs on the site; video makers have complained for a while that YouTube ad dollars aren’t high enough, and that the site takes too much of the revenue it does generate. Popular YouTubers also make money by selling integrated sponsorships in their own videos, and don’t have to share that money with YouTube.

YouTube’s investments will guarantee that the shows have an exclusive window on the site, and give Google’s sales force some tentpole products to sell. The deals also contemplate a way for the site to participate if the shows end up moving to other formats, like TV networks. The shows aren’t likely to appear on the site until next year.

YouTube declined to comment, but it has published a blog post attributed to the person heading up the new plan, Alex Carloss, an executive who reports to content head Robert Kyncl.

“Now, we feel the time is right to make another important investment in our creators. That’s why we’ve decided to fund new content from some of our top creators, helping them not only fulfill their creative ambitions but also deliver new material to their millions of fans on YouTube,” Carloss writes.

The new content push comes as some YouTube stars are entertaining offers from platforms that would like to be YouTube rivals, like IAC’s Vimeo, and Vessel, an upcoming service from former Hulu CEO Jason Kilar. None of those sites can ever rival YouTube’s reach, but they are telling Web stars they can generate more money there, either through ad sales, subscription fees or a combination.

YouTube head Susan Wojcicki, who started running the site in February, has made outreach to YouTube talent a priority. Last month she told Re/code that she was working on ways to “look at our creators, and think about how we can help them to grow and accelerate their businesses and this amazing content they’re building.”

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