Internet TV Channels? Netflix, Hulu, Yahoo and YouTube Are Buying Their Own Programming

According to a January 26th, 2012 AP article by Jake Coyle (picked up by The Huffington Post): "Over the next few months, YouTube, Netflix and Hulu will roll out their most ambitious original programming yet – a digital push into a traditional television business that has money, a bevy of stars and a bold attitude of reinvention."

"On Feb. 6, Netflix will premiere its first scripted show, "Lilyhammer," in which Steve Van Zandt ("The Sopranos") plays a New York mobster in witness protection in Norway. Later this year, it will release "House of Cards," a highly anticipated adaptation of the British miniseries produced by David Fincher and starring Kevin Spacey. Next year, it will debut new episodes of the cultish comedy "Arrested Development," which originally aired on Fox."

"'This convergence is now,' says documentary filmmaker Morgan Spurlock, who created "The Failure Club," a series about people trying to do the things they've always feared, for Yahoo, and "A Day in the Life," a series documenting 24 hours of someone's life, for Hulu."

Robert Kyncl, YouTube's vice president of global content partnerships, predicted in his January 9th, 2012 keynote address at the Consumer Electronics Show that Internet video will soon account for 90% of the traffic on the Web. By 2020, Kyncl predicted, about 75% of channels will be transmitted by the Internet.

The statistics about online video are already pretty persuasive: Netflix, which got its start in 1998 mailing DVDs to subscribers, streamed 2 billion videos in the fourth quarter of 2011. Hulu now boasts 30 million monthly users. And YouTube attracts about 800 million viewers a month. For example, Machinima, a YouTube channel for video game fans, now attracts more than 1 billion views every month from about 116 million people around the world. And that's just the beginning. YouTube reportedly spent about $100 million in 2011 in cash advances for original video content from traditional TV content producers (like Warner Brothers and Freemantle) and less conventional sources for ongoing TV shows (like Madonna and skateboarding legend Tony Hawk).

In 2012, users will begin to see some of the original programming created by that influx of cash. The internet distribution channels - with content (new episodes) updated frequently - will begin competing with traditional TV outlets (like the networks and cable channels) for viewers seeking first-run original content. But unlike traditional TV, where shows have a fixed airtime and an audience usually defined by a specific territory, internet original programming will be available 24/7 for streaming to a worldwide audience.

UPDATE On Feb. 6th, 2012 Fast Company published an interview Ari Karpel conducted with Ted Sarandos, Netflix's head of original programming.