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YouTube Bows Out of Hollywood Arms Race With Netflix and Amazon

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YouTube has canceled plans for high-end dramas and comedies, a pullback from its grand ambitions for a paid service with Hollywood-quality shows.

 

The Google-owned business has stopped accepting pitches for expensive scripted shows. The axed programs include the sci-fi drama “Origin’’ and the comedy “Overthinking with Kat & June,’’ prompting their producers to seek new homes for the shows.

 

The retreat from direct competition with Netflix Inc. and Amazon.com Inc.’s Prime Video service reflects the high cost -- in billions of dollars -- needed to take on those deeply entrenched players, even for a rich tech giant like Google. YouTube generated more than $15 billion in ad sales last year without a huge slate of glitzy productions and concluded its money is better invested in music and gaming.

 

“In some ways, they never really went all-in on the strategy,” said Anthony DiClemente, an analyst at Evercore ISI. “That’s like bringing a butter knife to a gun fight.”

 

The strategy change, first reported last November by the Hollywood Reporter, means all YouTube shows will eventually air for free. The company is still working out release strategies for the shows.

 

The shift also raises questions about the long-term future for Susanne Daniels, YouTube’s head of original productions since 2015. She was brought in to boost the volume and quality of YouTube’s original programming. “While it’s strangely flattering to be the topic of Hollywood gossip, please know I am committed to YouTube and can’t wait to unveil our robust slate of new and returning originals,” Daniels said.

 

While Netflix transformed itself from a DVD-delivery service into one of Hollywood’s largest studios, other technology companies have announced grand plans to make movies and TV only to retreat after a couple of years. Microsoft Corp. created a Los Angeles studio and ordered a show based on its popular game “Halo,’’ but shut down before the series came out. Yahoo lost $42 million on a trio of original series, including “Community,” and then scrapped its plans as well.

YouTube’s shift marks at least the company’s third reboot in the past decade and underscores what Hollywood executives see as the technology industry’s capricious approach to entertainment. In 2012, it paid producers and celebrities to create YouTube channels to bring more high-end original shows to a site then associated with cat videos and pranks. The company doubled its investment a year later, but then ended the program.

 

YouTube’s biggest success under Daniels was “Cobra Kai,” a TV series derived from the movie “The Karate Kid.” The show was the most popular program on any streaming service the week it debuted, according to Parrot Analytics.

 

 

The originals that will still exist on YouTube will now shift from the paid service to YouTube’s free version, where they will live alongside video blogs, makeup tutorials and toy “unboxing” videos.

 

YouTube Red, meanwhile, has been rebranded as a paid music service. The company has ordered short-form series highlighting emerging artists Maggie Rogers and Gunna, and Daniels has some oversight of those shows. But no programs can be approved without input from YouTube music boss Lyor Cohen. He vetoed a documentary about the Jonas Brothers, a pop trio, and the project landed at Amazon.

 

“Just because a big tech company wants to get into media, that doesn’t mean it’ll be successful,’’ said Rich Greenfield, an analyst with BTIG Research.

 

RETURNING SERIES:

Cobra Kai (Season 3, Premiering Next Year)

On the heels of a record-setting premiere of season two, YouTube has ordered a third season of the critically-acclaimed, fan-favorite series, "Cobra Kai" starring Ralph Macchio and William Zabka. The scripted series is written and executive produced by Josh Heald (Hot Tub Time Machine), and Jon Hurwitz and Hayden Schlossberg (Harold & Kumar, Blockers). Together, the trio conceived the new Karate Kid storyline that picks up decades after the original film. Heald, Hurwitz and Schlossberg will continue to showrun the series and direct the bulk of the episodes. Will Smith, James Lassiter and Caleeb Pinkett executive produce for Overbrook Entertainment in association with Sony Pictures Television Studios. Susan Ekins, Macchio and Zabka are also Executive Producers.

 

Kevin Hart: What The Fit (Season 3, Premiering Next Year)

In the unscripted comedy "Kevin Hart: What The Fit," Hart merges ridiculous workouts with hilarious special guest celebrity appearances. Past episodes have featured sumo wrestling with Conan O'Brien, a farm workout with Jennifer Garner and karate with Rebel Wilson. The first two seasons of What the Fit have driven over 275 million total views across all the episodes and related content to date. The series runs on Kevin's LOL Network on YouTube. Executive Produced by Hart, Matt Kunitz, David Shumsky, Rebecca Shumsky Quinn, Pip Wells, Mark Harris and Jeff Clanagan in association with Lionsgate.

As previously announced, scripted hits "Impulse" and "Liza on Demand" are currently in production and will return next year.

 

Impulse (Season 2, Premiering Fall 2019)

Following more than 31 million views of the pilot, "Impulse" will return with new episodes this year. Maddie Hasson stars as Henrietta "Henry" Cole, a rebellious 16-year-old girl who has always felt different from her peers and longs to escape from her seemingly quaint small town. During a traumatic event, Henry discovers she has the extraordinary ability to teleport, and her newfound power confirms Henry's conviction that she really was different from everybody else - but it now makes her the focus of those who want to control her. The series is produced by UCP (Universal Content Productions), Hypnotic, and showrunner Lauren LeFranc. Sneak peek teaser here.

 

 

Liza on Demand (Season 2, Premiering Fall 2019)

Following more than 22 million views of the pilot, "Liza On Demand" will return with new episodes later this year. The ten-episode, half-hour series follows the chaotic misadventures of Liza (Liza Koshy) and her roommates Oliver (Travis Coles) and Harlow (Kimiko Glenn) as Liza takes on various tasks and odd jobs while trying to get ahead in the gig economy. Featuring a young diverse cast, season one took satirical stabs at topics like gender bias and romantic tropes. Season two promises even more laughs and misadventures as Liza takes on a brand new set of challenges.

The series is produced by Above Average, a digital-first entertainment company founded in 2012 by Lorne Michaels' Broadway Video. Liza Koshy, Deborah Kaplan (Can't Hardly Wait) and Harry Elfont (Can't Hardly Wait, Josie & The Pussycats and Mary + Jane) and Courtney Carter will serve as executive producers on the series, with Sam Childs serving as producer.

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