Ad revenue rises as online channels challenge conventional broadcasters

Six decades ago a maverick entrepreneur named Allen B. DuMont set out to establish a risky venture called a television network. His initial schedule was cobbled together with niche programming — a bowling show, a fishing and hunting show, an Arthur Murray dance show, etc. His neophyte network was actually pulling in advertisers and building an audience before the vastly better-funded CBS and NBC pushed him aside in the late ’50s.

DuMont’s ill-fated venture came to mind last week as I examined the first-year results of the latest new network, or hundred-plus networks, established by YouTube. The niche programming vaguely reminiscent of DuMont is starting to gain considerable traction among advertisers — indeed YouTube seems ready to double down on its bet through expansion into further channels in the U.S. as well as in the U.K. and France.

Given the fact that YouTube is owned by Google, which is adding another $200 million to its initial $150 million bet, there’s little likelihood that this latest adventure in niche programming will suffer a DuMont-like demise.

“Niche programming provides a more immersive experience,” contends Robert Kyncl, the dynamic young YouTube executive who, as boss of its content, believes streaming video delivered over the internet will win its war over traditional TV.

Michael Hirschorn, former head of programming at VH1, argues, “In music and in video, YouTube is rupturing the chokehold that the major content providers have held over pop culture.” Partnered with Larry Aidem (one-time chief of the Sundance Channel) in Iconic TV, Hirshhorn’s channels now offer a bewildering blast of shows ranging from noise to nuance — Jay Z’s Life + Times, the electronic music of Skrillex, and a woman’s lifestyle channel starring Meredith Vieira.

Kyncl maintains that the number of people who subscribe to YouTube channels has doubled since last year, and his sales force is assuring advertisers that YouTube shows are “brand safe.” This means (among other things) a degree of product integration surpassing that of network TV.

Is the ad push working? YouTube may generate $3.6 billion in revenue this year, compared with $2.4 billion last year, according to a Citigroup analyst cited by the Wall Street Journal (which controls its own YouTube channels). Roughly 55% of that amount is paid to the video creators.

The potential payday for talent has encouraged a number of big names including Jay Z, Madonna and skateboarder Tony Hawk to get behind new channels. On the other side of the spectrum, a comedy channel from a YouTube-created personality like Ryan Higa can generate some 412,000 subscribers and more than 15 million video views. Another incentive: Several YouTube shows are migrating to network TV. A show called “Recipe Rehab” was just picked up by ABC stations for syndication.

All this is rather remarkable considering that YouTube got its uncertain start with a video about elephants at the San Diego Zoo on April 23, 2005. Co-founder Steven Chen then did some enormously forgettable pieces about his cat, Stinky. Founders Chen and Chad Hurley envisioned a video version of Flickr embracing personal clips about real people doing mundane things.

If half of all households will have wifi-enabled devices attached to their TV sets by 2016, some gurus think many users will start rebelling against costly cable subscriptions and become addicted to Web-based channels.

If Allen B. Dumont were alive today, he would doubtless be downright thrilled by the mounting uneasiness among the corporate monoliths.

Column Calendar: Monday: Peter Bart Tuesday: Cynthia Littleton wednesday: Brian Lowry Thursday: Andrew Barker/David S. Cohen Friday: Tim Gray/Ted Johnson

The targeted audience may be too obvious, the title too on-the-nose, the whole enterprise too calculated. But “Old Jews Telling Jokes” is the show that’s getting the biggest laughs off-Broadway these days, and is preparing to launch companies in Chicago, Toronto and other cities.

“Old Jews” was created by a film producer and a journalist who found themselves hooked on a Web series of the same name, and began obsessing about transferring the material to the stage — an alien universe to them. The show has been packing them in for four months now, defying skeptics who believe that ethnic humor doesn’t travel.

It was three years ago that Peter Gethers and Daniel Okrent found themselves laughing at the Old Jews website. Neither could boast theater experience: Gethers is president of Random House Films (a co-venture with Focus Features) as well as a prolific author, and Okrent is a busy journalist and a former public editor of the New York Times.

Having raised $1.5 million and negotiated a gauntlet of talent and production deals, the two mobilized some 77 jokes packed into 80 minutes to create their show. Yes, there are the inevitable Jewish mother jokes, Jewish princess jokes and other staples of ethnic humor mixed with a few poignant monologues about generational differences.

“We started out with an inventory of zero knowledge of the theater but 200 jokes to plunder,” says Gethers. “I suppose we proved that ignorance can be a form of bliss.”

He admits that some of the jokes are borrowed from Irish and Italian roots with the names changed to accommodate the title of the show (and the expectations of the audience). The punch lines are expertly delivered by five actors who also sing and dance and seem to enjoy themselves. There are even a few taped inserts from an old Alan King stint in Las Vegas.

Clearly the show isn’t angling for a Tony, but the audiences keep showing up — and may also do so in other cities with less obvious demographics.

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