Can Paris Hilton boost YouTube?

YouTube will unveil a number of custom branded commercial channels tomorrow in its latest move to monetize the site. The bizarre cultural icon Paris Hilton is already highlighted on the front page of the site with her own YouTube channel, to correspond with the release of her debut musical album on Tuesday. Fox has paid an undisclosed sum to advertise its TV show Prison Break on the YouTube channel of Hilton, whose album is produced by Warner Brothers. YouTube reportedly pays more than $1 million each month in bandwidth costs and some people have been concerned that it would be a challenge to turn its huge traffic into money. Thus Paris Hilton to the rescue.

Robin Bechtel, head of new media at Warner Brothers Records, told the Financial Times tonight that Paris Hilton and YouTube were a natural fit. That’s hard to argue with. Hilton’s channel on YouTube contains 13 music videos, a promotion for Paris Hilton cell phone ring tones and custom branding that looks much nicer than the standard YouTube page design. Other branded channels haven’t been identified as of midnight.

YouTube was launched in February of 2005, has raised at least $11.5 million from Sequoia Capital and reports that it delivers more than 100 million videos each day. CEO Chad Hurley said last week that brand driven advertising was of more interest than ads inside of videos and today we get to see that strategy in action. The company said last week that it intends to host every music video ever made within the next two years.

Custom branded channels may create a sufficient partition from the parts of the site filled with copyrighted content and thus command higher ad prices. I’ll be watching the Paris Hilton channel closely and will report further details as they become available.