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YouTube plans overhaul, spends $100 million for original content

Original content is all the rage these days. Recently, Netflix announced it had bought exclusive rights to a David Fincher and Kevin Spacey produced television series, then later stated it had also acquired the rights to air certain seasons of hit TV shows Glee and Mad Men. Now, YouTube wants a piece of the original programming pie—and is willing to spend millions of dollars for it, to boot.

The Wall Street Journal claims, sourcing "people familiar with the matter," that Google is planning to spend $100 million dollars (the same amount Netflix paid for the Fincher-Spacey series) to produce low-cost content made specifically for the web. They have already begun negotiations with Hollywood agencies to hire talent, though WSJ says those talks will most likely lead to deals with directors or production companies more so than stars.

As part of a major overhaul, YouTube will air several hours of this content categorized in about 20 different "channels." It's all part of YouTube's ploy to get people to stay on its site and watch videos longer than they currently do. They will create a variety of channels that will be based on "topics such as art and sports." Aside from the 20 channels that would feature the aforementioned original content, other channels would rely on videos already uploaded on the site.

It wasn't too long ago that YouTube tried to license content from professional Hollywood studios, but to no avail. The current offering of content has yet to strike a chord with consumers and YouTube was unwilling to pay the same amount in licensing fees as Netflix or other competitors did for certain programs. This new direction would certainly prove to be a one-eighty, going from licensing content to creating it

Now, not only is YouTube hoping on increasing the time users spend on the site (currently about 15 minutes a day) but they also want to dig in to the $70 billion US television ad market. "YouTube executives say they want people to 'watch YouTube' the same way they 'watch TV,'" the WSJ says. But it's not like YouTube isn't seeing any revenue. The site is currently the third most visited in unique monthly visitors, it made $544 million in revenue in 2010, and it is expected to make $800 million this year. YouTube has "said the site is close to being profitable."

As for a website overhaul, YouTube spokesperson declined to comment.

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