Dive Brief:

• YouTube is scaling back its original scripted programming starting in 2020 as part of a broader shift in strategy to focus more on ad-supported video, according to a report in The Hollywood Reporter. The platform is planning to make all new originals free to users whether or not they are paid YouTube Premium subscribers. 
• YouTube will soon stop distinguishing between programming that is ad-supported or ad-free and is working on deals to let viewers watch original shows without paying, per The Hollywood Reporter. The service is considering releasing shows week-to-week for free, giving viewers the ability to binge watch if they subscribe to Premium or offering extended cuts to subscribers. 
• While a source told The Hollywood Reporter that the YouTube Originals team will face "a serious budget reduction," YouTube is still moving forward with second seasons for the Karate Kid reboot "Cobra Kai" and the show "Impulse." The company has also recently ordered pilots for an adaptation of "The Edge of Seventeen" and "Dark Cargo," but will likely halt future buying as it works on its new programming strategy.

Dive Insight:

YouTube has invested in original programming as a way to extend its reach beyond user-generated video and make inroads into a market dominated by players like Netflix, Amazon Prime and Hulu, which spend billions on their own shows. The Google-owned platform reportedly already scaling back on those ambitions just a few months after ramping them up underpins the difficulties of breaking into the premium digital video market and also suggests that viewers are potentially oversaturated with options when its comes to online subscription services. YouTube's premium efforts have had pockets of success — "Cobra Kai" was especially well received — and the platform certainly had a vast audience well to draw on given its 2 billion users. 

But this isn't the first time YouTube has tweaked its premium product, which was previously known as YouTube Red, amid apparent struggles. The video platform announced a new programming distribution model in July for YouTube Premium, including adding more content in front of the paywall to attract subscribers. The platform had released first episodes of original series for free and then encouraged viewers to sign up. For example, the basketball docuseries "Best Shot," produced by NBA star LeBron James, was released in full on Premium, but YouTube also showed new episodes weekly for free with ads to non-subscribers, per The Hollywood Reporter. 

There have been other recent signs that YouTube is looking to lean into more ad-supported video content. In October, it began showing a selection of free Hollywood films like "Rocky" and "The Terminator" that appear alongside movies that users can rent or buy through the platform. YouTube serves ads during the movies from its usual pool of advertising demand. In the future, the platform could allow advertisers to sponsor individual movies, giving viewers free access and exclusive screenings. 

The YouTube news follows reports this week that Facebook is shifting strategy for its Watch platform, an ostensible YouTube and Netflix competitor that has similarly struggled to court a significant following. Facebook will now focus on audiences who are age 30 and older rather than the teens and younger millennials the service initially seemed to target, according to CNBC. Facebook is reportedly talking to at least three media companies for Watch video content aimed at the older crowd and is looking for shows that are hosted by traditional celebrities instead of influencers.