YouTube expands support for Professional Content

YouTube recently indicated that it will expand its relationship with professional production companies, investing another $100 million to create programming exclusively for YouTube, and designed for viewing on mobile devices, computers, and connected-TVs.
  YouTube's VP of Global Content, Robert Kyncl, announced the first wave of YouTube "artist channels" featuring original programming at this year's CES show.  Kyncl predicted that online video will drive 90% of all online traffic within a few years, and that by 2020, 75% of all media channels will originate on the Web.

One question is whether YouTube will rely on advertising to monetize that original content, or whether it will create a subscription service like Hulu+. 

It's all about ads -- as Google knows well, according to Forrester Principal Analyst James McQuivey. "When millions of people watch something, advertisers will happily pony up the cash to sustain it," he said. "Since YouTube content is relatively cheap to produce -- $100 million may sound like a lot to you and me but for video production, it’s a drop in the bucket -- Google doesn’t need advertisers to spend as much as they do on TV content to come out ahead."

The potential for such channels to drive viewing is amply illustrated by the Machinima channel, which is said to deliver more than a billion video views monthly to more than 116 million viewers around the globe.

Sources - YouTube Invests $100 Million in Original Programming,  OnlineMediaDaily