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Four Ways YouTube’s The Space Could Help the Company Survive the Netflix Wave

Four Ways YouTube's The Space Could Help the Company Survive the Netflix Wave

With Netflix dropping $4 million for each episode of House of Cards, YouTube is suddenly seeing a lot of well-heeled competition for original programming.

Of course, through its premium channel initiative, Google’s network has been investing as well. Machinima, its most premium channel, recently inked a deal to incubate films with the likes of Ridley Scott.

But YouTube didn’t grow into a global video leader by giving Hollywood directors money. In the past I’ve argued YouTube might be leaving “amateurs” in its past and out of its future. This is because of YouTube’s much-discussed advertising problem. A recent report from AllThingsD exposed that programmers aren’t seeing their ad rates (CPMs) rise fast enough to meet the demands of producing original content. Google’s investment was meant to signal to advertisers there was a lot of value on the site. The company maintains this strategy worked.

If it hasn’t worked, it might be because Google’s premium channels leaned on corporate production companies — like Electus, Hearst, Demand, Reuters, etc. — and celebrities like Shaquille O’Neal and Pharrell Williams who didn’t know the site as well as its homegrown talent.

But Google has built a studio for that talent: YouTube Space Los Angeles. The Space has received a bunch of press over the past few months giving Google a pat on the back for constructing a high-end space for low-end users.

What is Google getting out of this investment? I visited the Space last month to check it out.

1. Encourage Collaboration

When I walked into the Space I saw a long conference table with young people chatting and working. The idea for that workspace came from Liam Collins, once an executive at Next New Networks and now head of the Space. Next New Networks was one of YouTube’s first big purchases, and, through the NextUp programs, it has been the font of a number of initiatives to professionalize YouTube users. The open lobby was designed to encourage collaboration.

“YouTube didn’t have a space designed for creators,” Collins told me. “The Google security team was used to building offices spaces for Google, and so the place was going to be on lockdown. You were going to need special badges and everything and we said: ‘the downstairs belongs to YouTube partners.’”

Dominating the lobby that day were fans of Olga Kay, a veteran YouTuber with nearly 1 million subscribers across several channels. Olga was shooting a trailer for her channel and put out a call for extras on Instagram and one of her secondary channels. I met Kay while she was shooting in the Space’s screening room, which you can see in the final product:

Talking with Kay and her cameraman Matthew Hibbs in the screening room they discussed a big project involving a bunch of YouTubers in the Space: a Hangover parody, timed for the sequel’s release, about waking up in a castle and trying to find out what happened. YouTubers at the studio would supply the cast of characters.

“It’s a way to collaborate with people because that’s what the “Hangover,” if you’ve ever watched it, is. It’s all them running into different people,” Hibbs said.

By having creators in one Space, casting for ambitious video gets easier, which lowers costs. At the same time, every participant already has a built-in audience, which drives traffic.

2. Cultivate a Supply Chain

This “class” of creators is YouTube’s way of developing its supply chain and helping channels of various sizes grow. YouTubers with a production plan apply online. If they’re accepted, they get access to the Space for a quarter. The first class at the studio included 23 channels.

Kay was on the higher end of creators in the class. YouTube helped her get into the Space because Google wants creators to share best practices.  They want a range of expertise represented each quarter.

On the lower end are creators like Nikki Limo, whose channel has a respectable 70,000 subscribers. For Limo, the Space offered her access to more experienced talent and higher-end facilities. When I ran into her, she was editing a new web series for her channel, “Audition Fail,” which she shot in one of the Space’s conference rooms and is releasing episodes this month (trailer above). Her access to the studio allowed her to cast YouTube stars like Grace Helbig (850,000 subscribers) and KassemG  (2.2 million subscribers).

I really wrote it to be collaborative and have guest YouTubers in each episode. Luckily I got all my first-choice actors for all of them….I’m excited,” she told me.

The studio is also motivating Limo to up her skills. A novice editor, she was spending her time getting used to the latest edition of Final Cut when we met. The post-production room at the studio is, again, designed to allow for collaboration and co-teaching, so if Limo has a question she can grab a fellow editor and work on it. In general, there’s a lot of glass at the Space, which Collins said was designed so YouTubers could see how others work.

To train and grow its supply of creators, the studio also hosts regular workshops and events open to creators outside the class, like the “Animation Pros” panel featuring experts like Dane Boedigheimer, whose “Annoying Orange” was developed for Cartoon Network.

All of this is very important to Collins, who has been pushing YouTube to cultivate creators ever since it acquired Next New Networks. 

“After we got acquired, we immediately started advocating for this. Because at Next New Networks we always had some production space. Our feeling was that we always want to be friendly to talent. And one way we can do that is by being closer to them,” he said.

3. Allow Flexibility

With so many different kinds of creators on YouTube and populating the studio, a big challenge for Collins and Google was designing a space for creators of different skills levels. The facilities are at once high end and beginner-friendly.

“It can be simple for someone like Alex G, who’s used to shooting in her bedroom, and it probably will look a step up from what she’s been doing,” a Google spokesperson said. “It also has to be sophisticated enough for someone like Amy Poehler who’s used to shooting on TV with huge sets and production budgets.”

The studio has three 22-foot tall green screens, which are very popular. The room is already professionally lit for creators who aren’t used to shooting in such settings. At the same time the rooms have all the functions professionals would need, and that novices can experiment with.

“If they come in here, they can start to play with different lighting angles, fill lights, back lights, and appreciate what kind of a difference it makes for you selling. One of the biggest differences in selling a green-screen shoot is lighting the subject properly, so, this is a place where they can experiment with that. There’s only 12 or 24 faders over there. So there’s not too much damage they can do,” Collins said.

The Space provides creators with tons of equipment, managed by an expert library at the end of the lot. Creators book equipment online, though many also bring their own. For cameras, the studio is Canon-based, with C300, C100, XF05 and 5D’s in stock. The idea is to have a range so inexperience creators can experiment with higher-end fair — something Nikki Limo did — where experienced creators have everything they may need. “It helps them improve their content as well as their knowledge of filmmaking,” Chris, the equipment manager, told me.

The Space also has a screening room with a 4K projector, 10 editing suites and a pair of sound stages with multiple audio inputs for live recording and editing.

4. Reward Veterans

In the Space’s 6,000 sound stage was the set of Freddie Wong‘s much-anticipated (and amply crowdfundedVideo Game High School. The second season of VGHS is supposed to be much bigger than the first. Wong wants to explore more characters and different types of games through six half-hour episodes released on YouTube. Given free access to the studio cut down costs and allowed Wong to invest more in overall quality.

“The production design is just over the top in terms of how good it looks,” Wong told me. “We’re really putting together something that we feels competes with television.”

Wong approached YouTube about using the studio to shoot parts of the second season. VGHS is one of the site’s snazzier productions, so YouTube eagerly obliged. Indeed, when I visited, the set of VGHS literally covered the walls. “We pretty much utilized every part of the space,” Wong said.

In return, Wong is helping educate the creator class on the intricacies of post-production (which he already does through his second YouTube channel, which has 1.1 million subscribers). “Everything after the cameras stop rolling, we’re involving creators in that process.”

This year’s other resident is Dave Days, a musician who’s been on the site for years. Days, who released his latest album last month, is shooting an ambitious series called “Writing Room,” which pairs 10 YouTube musicians with 10 songwriters to create a series of original songs and music videos. A teaser came out last week.

“I saw one of the episodes so far and it looks really awesome,” Days said in an interview. “We definitely want to do more. I want to keep [YouTube] music-based.”

But Is Anyone Making Money?

Creators who have access to the Space seem happy to have some support from Google. But can being creator-friendly help YouTube bring in big advertisers, which, ultimately is the point?

While he’s been working for Google, Liam Collins has tried to make that very point.

“It’s been great to see the pendulum shift…We have to be investing in our partners in order to be successful ourselves in the long term.”

Google could even be investing more. The company doesn’t officially comment on the cost of the space, but it’s been reported at around $25 million. That’s only a fraction of the advances it gave to channels for original content support, and as snazzy as it is, it wouldn’t cost much more to increase support staff for new creators, or include more programs to bring a greater diversity of talent. 

Of course, YouTube Space is new, so it remains to be seen whether it will expand and flourish, or wither and die under competition from Netflix, Amazon and Hulu, who are working with established Hollywood talent.

For now, YouTube is off to a respectable, if modest, start.

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