YouTube has tried its hand at funding original content more than once — with disappointing results.
Ten years ago, YouTube believed it needed to more directly compete with the Netflixes of the world. Robert Kyncl, then YouTube’s chief business officer (who left to become CEO of Warner Music Group in 2023), in 2015 hired TV veteran Susanne Daniels to build a slate of original programming — available exclusively to subscribers of YouTube Red (later rebranded YouTube Premium).
Daniels, who had been MTV’s head of programming and a top exec at the WB and Lifetime, led the team that greenlit series featuring YouTube creators like PewDiePie, Markiplier, Rhett & Link and Liza Koshy, as well as scripted originals like “Karate Kid” offshoot “Cobra Kai.”
However, the originals were not delivering the payback YouTube execs anticipated via subscriptions. The platform shifted to make YouTube Originals available for free with ads, an attempt to better monetize them. In 2019, YouTube started to exit the scripted game to focus on unscripted fare. Some of its popular series found homes elsewhere: In 2020 “Cobra Kai,” from Sony Pictures Television, was picked up after two seasons on YouTube by Netflix (where it would run another four seasons). “Step Up,” based on the film series, lived on YouTube for two seasons and moved to Starz for a third and final season.
Then, in early 2022, YouTube wound down the originals initiative altogether. Daniels left YouTube that spring.
Neal Mohan, who became YouTube’s CEO in February 2023, says the one-time thesis was that the platform could give a boost to homegrown creators by financing bigger-ticket productions — and then share in the upside. What happened, he says, is that popular YouTubers organically began producing premium-level content that was as good as anything on TV or other streaming services.
Big creators on YouTube “are the new Hollywood in that sense because they are producing the content that people want to watch,” Mohan says. “And so that eliminated the need for us to do anything in that regard because our creators were doing it on their own.”
Moreover, Mohan says, YouTube’s original content strategy didn’t work because “we weren’t good at picking content.” As a technology platform, YouTube is good at building tools for creators and viewing experiences for viewers, he says. So YouTube decided to exit originals to focus on that — “and let our creators do the rest,” Mohan says.
The Google-owned video giant had made an earlier effort to throw money at content produced for YouTube. The YouTube Original Channels initiative, launched in 2012, doled out some $100 million to dozens of channels from partners including Madonna, Jay-Z, Amy Poehler, Sofia Vergara, Shaquille O’Neal and WWE. In addition, Google pledged $200 million more to market them. Although many of the channels are now dormant, YouTube execs have claimed the initiative had the desired effect of jump-starting original content development for the platform.
YouTube’s push into funding original programming and subsequent pullback raises a question: Does traditional studio-produced content yield better economics for creators and platforms?
Netflix’s subscription-based model “generates higher returns for creators” compared with YouTube, Netflix co-CEO Ted Sarandos claimed on the company’s Q3 earnings interview in October 2024.
But in general, there’s money to be made via either user-generated content or professionally produced content — the key success factor is having broad scale, says Scott Purdy, U.S. media industry leader at KPMG. The benefit of YouTube’s UGC model, he says, is the platform doesn’t have to fork out cash for content upfront. Rather, it pays out ad revenue based on how popular videos are. “It’s a no-risk model,” says Purdy.
Pictured above: Ralph Macchio in “Cobra Kai” Season 1
