The Reason YouTube Doesnt Spend As Much As Netflix on Original Shows. Yet.

It hasn't needed to so far. But it's now ramping up. JL

Eric Johnson reports in Re/code:

“If you look at the core YouTube business, to be able to continue to grow that ... we have 1.5 billion signed-in users coming to our site every single month. That business is one where not one show is going to drive those numbers.”Instead, the most important driver of growth is the diverse “giant long tail” of creators who have carried YouTube this far. “You want to have enough of a budget that you can actually experiment, but not so much budget that you can hang yourself with it and get stuck."

The “quintessential YouTube video,” according to YouTube CEO Susan Wojcicki, was once short, simple and — most importantly — amateur: “Oh, here's your cat, and it's on a skateboard.”

Wojcicki reflected on how much has changed in a relatively short time. Since YouTube’s paid subscription service, YouTube Red, launched two years ago, everything has become “much more professional.”

“We actually have thousands of people who are making a living, just generating YouTube videos,” she said. “We now have deals with pretty much every single Hollywood company. They’re putting their shows on YouTube. We get all the sports clips, and we get the highlights.”

But even though YouTube Red hosts original series created by some of YouTube’s stars, Wojcicki noted that there are some big differences between the platform and its all-professional all-Hollywood competitors, such as Netflix, Hulu and Amazon.

“Even having a great show — whether it's ‘Handmaid’s Tale’ or ‘House of Cards’ — yes, those are fantastic shows,” Wojcicki said. “If you look at the core YouTube business, to be able to continue to grow that ... we have 1.5 billion signed-in users coming to our site every single month. That business is one where not one show is going to drive those numbers.”Instead, she said the most important driver of growth is the diverse “giant long tail” of creators who have carried YouTube this far. However, she pointed to an upcoming drama series based on the “Step Up” movie series, which will likely debut in late 2017, as an example of higher-budgeted programming.

“The reality is, you have to be responsible in how you run this,” Wojcicki said. “You want to have enough of a budget that you can actually experiment, but not so much budget that you can hang yourself with it and get stuck. If we went out there and spent billions of dollars, and it didn't go very well, it probably wouldn’t happen again.”