Amanda Taylor is ready to roll out her vision of the next big thing in reality dance competitions. A blend of popular shows “Dancing With the Stars” and “So You Think You Can Dance,” her competition, called “Dance Showdown,” will pair novices with pro dancers. The audience will vote on their favorites.
But Taylor’s show won’t be on ABC or Fox. Instead, she’s hoping to capture the attention of millions of viewers on YouTube.
Her company, DanceOn, is one of dozens that have signed on to develop video for YouTube’s initiative to bring professionally produced content to its online video website as opposed to its famous clips of silly cats.
There’s a high concentration of these companies forming in Los Angeles as the city fast becomes known as a new-media and online entertainment hub.
Taylor even moved her 15-person company to Los Angeles from New York in December to be closer to other new-media companies.
“It’s interesting to see how YouTube celebrities are all gravitating to L.A.,” said Taylor, DanceOn’s chief executive. “What’s going on in content creation is here. There’s definitely a lot of interesting things going on in this area and we wanted to be part of that.”
Since YouTube announced its plans to put money into original content channels in October, at least seven L.A. companies have signed deals with the San Bruno company. Among them, Santa Monica’s Demand Media has created three YouTube channels that focus on home and garden, pets and female health; Young Hollywood in West Los Angeles has launched a channel dedicated to celebrity and entertainment news; and Hollywood-based Machinima has developed a channel for video game news and trailers.
For those companies, which YouTube calls its content partners, working with the site gives access to the Internet giant’s viewers and ad sales. The website has 800 million viewers each month and can sell targeted advertising around its videos. And because it’s owned by Mountain View search giant Google Inc., it can promote its videos on a number of Google services.
“There’s not a cable channel or network that has the reach that they have,” said R.J. Williams, chief executive of Young Hollywood. “They have an amazing infrastructure set up that we can leverage.”
But Dan Rayburn, a digital media analyst in the New York office of Frost & Sullivan, noted that a video isn’t necessarily guaranteed to become a hit just because it’s on YouTube. Some do, but thousands of others never get traction. Many of the site’s videos of dogs doing silly tricks or pop culture spoofs don’t get more than a couple of hundred viewers.
“It’s too early to tell what kind of traffic they’ll get,” said Rayburn, who’s also the executive vice president of online video news company StreamingMedia.com. “YouTube has the reach and they have the money to invest up front, now they just have to prove that it works in the market.”
Online originals
The seven-year-old YouTube first made a name for itself as a website where anyone could upload home videos of cute animals or funny bloopers. It quickly became a phenomenon that featured old video footage of performances and TV shows, and tutorials on home repair and music lessons. It was bought by Google in 2006.
YouTube has taken note of the activity here.
“Los Angeles has long been a hub for innovation and creative expression, so it’s great to see this growing community of L.A.-based companies building next-generation, original channels,” said Alex Carloss, global head of original programming for YouTube.
The company’s plan to create original channels marks its first foray into professionally produced video content exclusive to its website. YouTube is spending about $100 million on the initiative.
Companies that want to create an original channel for YouTube go through a lengthy pitching process. Once YouTube selects the channels, it gives the companies a grant to help with the cost of producing shows. YouTube then sells advertising around the channel, splitting the revenue. In return, content partners give YouTube exclusive rights to the video for a period of time.
Because of the extra funding from YouTube, content partners are able to create higher-quality videos than they otherwise could, said Steven Kydd, a former vice president of studios at Demand Media who oversaw the company’s partnership with YouTube. (Kydd left Demand after this interview. A company spokeswoman said his departure has not affected its partnership with YouTube.)
“They were very clear that the economics of these relationships are different,” Kydd said. “They’re providing funding to content partners for us to create higher-quality programming than we’ve done in the past.”
For example, one of Demand Media’s channels will feature a recurring segment where a host designs, builds and decorates a home in 150 days.
Jack Myers, a media economist and publisher of New York blog Jack Myers’ Media Business Report, noted that the industry has a long way to go before it catches up with the big budgets of network TV.
“I think it’s important to keep in context that $100 million is a drop in the bucket compared to the billions that networks invest,” he said. “Nonetheless, they’re a force to be reckoned with and a major player.”
Even so, companies such as DanceOn are betting big that the future of TV is linked to the Internet and that YouTube is facilitating that transition.
“What we experience on the computer will soon be something that we experience in the living room,” said DanceOn’s Taylor. “We’re all advancing to this next phase of entertainment.”
And as the entertainment industry merges with digital, Los Angeles is attracting this new breed of digital media companies.
YouTube, which shares an office space with Google in Beverly Hills, is expected to grow its presence in Los Angeles when it closes a deal on a much larger 41,000-square-foot office in Playa Vista this quarter.
New-media companies looking to work with YouTube also are setting up shop in Los Angeles. For example, Big Frame, a company that connects YouTube stars with advertising and sponsorship deals, was founded in Hollywood last summer. Big Frame is launching a YouTube channel called Bammo that will feature performances from already established YouTube stars, such as MysteryGuitarMan.
Steve Raymond, Big Frame chief executive, previously worked with NBCUniversal and MTV Networks. He said the company was committed to starting in Los Angeles because of the entertainment industry.
“There are a lot of us in the technology space who are constantly looking for opportunities to bridge technology and entertainment and have to be located in Los Angeles,” Raymond said.
Companies such as Big Frame and DanceOn that were created specifically to develop content for YouTube are helping to establish a subindustry built around YouTube’s platform much as an industry was created around network and cable TV.
And the original content initiative is driving growth for those businesses. DanceOn plans to double its staff to about 30 in the next few months and Big Frame has grown to 25 employees since the summer.
Even established companies such as Young Hollywood are ramping up their video production business. The company recently expanded its studio by about one-third and has added more production staff.
“The funding for us represents the opportunity to accelerate our hiring and building of our team,” said Big Frame’s Raymond. “The program is definitely creating jobs in Los Angeles.”
