With competitors nipping at its market share and pouring ever-larger amounts of money into developing original content, YouTube is betting big on its homegrown talent this year. The Google Inc.-owned video giant announced in a blog post Tuesday it has partnered with Awesomeness TV on four content endeavors, including its first feature films, two scripted sitcoms and a reality TV show, all created by YouTube stars.
“We decided to take an even bolder step to invest in ambitious projects from our top creators,” the post read.
Those creators -- the Fine Brothers, Prank vs. Prank, Joey Graceffa and the production duo Smosh -- are all part of a growing galaxy of personalities who have found success creating content for YouTube’s young audience. Though they’re largely unknown among older demographics, millennials find them more appealing than most mainstream stars, and in the past year or so, YouTube stars have become a hot commodity. YouTube has put them front and center in brand campaigns and has made them the face of its coverage of events like the State of the Union and the Super Bowl Halftime Show. Other video providers, including Vimeo and Vessel, have begun trying to lure them away by offering more favorable revenue opportunities.
This is not the first time YouTube talent has made the leap from digital screens to televisions. Earlier this month, a film-length version of "Side Effects," a series that began on YouTube, aired on E!, and stars like Michelle Phan have parlayed their success into TV deals abroad.
But for the most part, YouTube has a spotty record when it comes to grooming young talent for the transition to more established mediums. The creators named in Tuesday’s announcement have thrived by creating clips that are less than a third of the length of a typical episode of television, and those clips look and feel very different from the TV and film projects they’ll be expected to deliver. It's also not guaranteed that the stars' audiences will be interested in scripted fare; the YouTube Original Channels Initiative, a $200 million experiment that mostly flopped, found scripted, more traditional-looking content didn't perform as well as the spontaneous, looser-feeling video these stars make.
The stakes for these ventures are high. The Wall Street Journal reported in February YouTube is not yet profitable despite a 33 percent increase in annual revenue to $4 billion. An executive familiar with YouTube's finances said lack of profitability was partly due to an increased investment in original content.