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YouTube Ready to Announce Original Content Channels

Friday, 28 Oct 2011 | 5:27 PM ET
CNBC.com

It's been in the works for years, and later today YouTube will finally announce the creation of 100 new online YouTube channels with original programming. The tech giant spent months working with Hollywood agencies and has secured deals with celebrities including Ashton Kutcher, Amy Poehler, and Deepak Chopra. Most of these channels will launch next year, creating about 25 hours of new programming per day.

The company will share ad revenue with the content creators, giving 55% of revenue to the content creators, who it calls 'partners,' keeping 45% for itself. To finance the production of content the company will pay more than $100 million in advances to go towards production.

YouTube may have been built on user-generated content, and it may have struggled with licensing TV content. But the pending announcement is about the content right in the middle — professionally generated content created just for the web, just for the YouTube platform. This surge of new original content will make YouTube into the cable broadcaster for the next generation — the one destination for channel surfing, or searching for niche entertainment.

YouTube's big announcement comes on the heels of Google's announcementabout the re-launch of Google TV . These new channels are valuable because they aren't just limited to users laptops. With the rise of Internet-connected TVs, with interfaces like Google TV, consumers will be able to seamlessly watch this content on their flatscreens. That means YouTube will be able to target the $60 billion TV ad market, which dwarfs the $2 billion online video ad business. Today's announcement isn't just about growing online video ad revenue, it's about growing the ad business on every device where users can watch video.

Questions? Comments? MediaMoney@cnbc.com

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  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.