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YouTube hopes full-length shows will pump up advertising revenue

October 11, 2008|Swati Pandey | Times Staff Writer

YouTube surfers weary of webcam rants and lo-fi homemade dance routines will now be able to watch real celebrities in professionally produced shows on the popular Google Inc.-owned video site.

Partnering with CBS Corp., YouTube announced on its blog Friday that it would post full-length episodes of old fan favorites such as "MacGyver" and the original "Beverly Hills 90210," along with newer hits including "Dexter" and "Californication," in a bid to bring more advertisers to its highly trafficked site. YouTube is also in talks to add shows from other networks and feature-length films.

Advertisers haven't always been comfortable linking their products to YouTube content, much of which is user-generated and only a few minutes long, notes Jupiter Research analyst James McQuivey.

For YouTube, that meant running relatively few ads in unobtrusive places for fairly low prices. The site is expected to generate about $200 million in revenue this year, notes Times staffer Jessica Guynn. Google bought YouTube for $1.65 billion in 2006.

But, McQuivey notes, advertisers aren't squeamish about classic TV. "Advertisers understand those shows and are happy to sponsor them," McQuivey says in an e-mail.

The full-length episodes will include streaming ads sold by CBS, which will share the revenue with Google.

Most of YouTube's rivals that also offer full episodes of programs have similarly placed ads. TV episodes aren't hard to find online, at sites such as Hulu.com, jointly owned by NBC Universal and News Corp., and theWB.com, which resurrects the now-defunct teen-friendly network, along with networks' own websites, including CBS.

But YouTube is arriving a bit late to the party.

"YouTube comes at it at a large disadvantage," McQuivey says. "But it has one thing that no one else has: millions of viewers a day."

This is YouTube's first attempt to enter the TV on-demand game since its Wild West days back in 2006, when users freely posted their recordings of televised -- and copyrighted -- content. YouTube fell under harsh lawyerly scrutiny while simultaneously raking in viewers, many of whom came for the bootlegged "Daily Show" but stayed for "Evolution of Dance." It's still fighting off a billion-dollar lawsuit from Viacom Inc., which sued for copyright infringement.

YouTube, however, hasn't been all snippets. The site has featured some longer form content as well, including a pre-broadcast second-season premiere of "The Tudors" and some independent films. But it declined an offer from Hulu to syndicate its content to YouTube, notes Jupiter's McQuivey.

In July, YouTube viewers watched about 5 billion videos, according to ComScore Video Metrix. That's 10 times higher than the number available through runner-up Fox Interactive Media. Hulu came in eighth with 119 million videos watched.

Of course, YouTube viewers go to the site for clips, not shows, as YouTube product manager Shiva Rajaraman acknowledges. "It's like walking into two different department stores," he says. "You have different expectations, and you act differently."

But, Rajaraman notes, reaction has been positive to previously posted long-form content such as "The Tudors," and full-length videos will bring YouTube closer to becoming a clearinghouse for all forms of video content. Also, users might be drawn to YouTube for its comments section and related video content, absent from most other online TV streaming sites.

"Participation is merited, and users have an audience for whatever they contribute," Rajaraman says.

For now, only a selection of episodes from each show is available (par for the course for online TV), and they're somewhat hard to find. The episodes aren't hyped on YouTube's landing page -- which might explain the relatively low view counts -- as YouTube studies its users' reactions and explores how best to promote full episodes on the site.

Google shares gained $3.02 Friday to $332 in Nasdaq trading.

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swati.pandey@latimes.com

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