Can Honda’s $50 Million YouTube Channel Revolutionize Online Video?

On June 11th, Honda announced a multi-million dollar plan to completely overhaul its advertising strategy. It has unveiled Honda Stage, a YouTube channel that will feature $50 million of musical content from the nation’s top acts.

In order to populate its new music channel with appealing content, Honda will team up with big names in both music and online video. Its partners will include Live Nation, Clear Channel’s iHeartRadio, Revolt, YouTube and Vevo, all of which will contribute content to Honda Stage.

Honda Stage is the automaker’s plan to reach 20-to-35 year olds, a group its execs see as a crucial demographic. Those consumers are increasingly tuning out TV commercials, but online branded content has emerged as an effective way to reach them. “TV, as we know it…doesn’t work as well to reach a 28-year old,” said American Honda VP of advertising and marketing Tom Peyton. “It still works pretty good for Baby Boomers. But it doesn’t work as well for 25-year olds and 28-year olds.”

The revolutionary part of Honda Stage is the brand’s plan to shift dollars away from cable in order to fund its new channel. “This is a quantum leap,” said Peyton. “We are building a significant digital platform. It’s not a toe in the water. And we think this is more effective than a cable buy.”

Other brands, such as Red Bull and Pepsi, have seen large-scale success on YouTube through high-quality distribution pipelines that focus on specific subject. Stage’s setup seems similar to those brands, and the $50 million budget shows that Honda has huge ambitions right out of the gate.

Honda believes the Stage channel will draw two billion views in its first year. If it hits that goal (which, given the popularity of music content on YouTube, will be difficult but not impossible), it could tip the balance of advertising budgets and convince brands to make huge investments online at cable’s expense.