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By Jack Nicas 

YouTube is canceling its top star's show and removing his channel from its preferred-advertising program after he made anti-Semitic jokes or showed Nazi imagery in nine videos, a setback to the site's efforts to persuade companies to advertise before its videos.

YouTube, a unit of Alphabet Inc.'s Google, made the decision to distance itself from its most popular creator -- 27-year-old Felix Kjellberg, who goes by PewDiePie -- after The Wall Street Journal reported on a string of videos with anti-Semitic content he made over the past several months.

YouTube canceled the second season of Mr. Kjellberg's show, "Scare PewDiePie," which anchored YouTube's $10-a-month subscription service, a major bet for the company.

The company also pulled his PewDiePie YouTube channel from its Google Preferred program that lets advertisers buy space before "some of the most engaging and brand safe" videos on YouTube. The PewDiePie channel has amassed 53 million subscribers, nearly double the next most popular YouTube channel.

Mr. Kjellberg will be able to post videos to his channel and earn revenue from ads sold before his videos play, but those ads will only be sold through an automated ad auction that generally fetches lower prices than the preferred program.

Mr. Kjellberg also lost his deal with Walt Disney Co.'s Maker Studios, which helped run his business. After the Journal asked Disney about the videos, the company severed ties with Mr. Kjellberg.

Mr. Kjellberg's anti-Semitic content included videos in which he paid two men to hold a sign that said "Death to All Jews" and showed an actor dressed as Jesus Christ saying "Hitler did absolutely nothing wrong."

Mr. Kjellberg, in a later video, said he was making a joke, and that media outlets were misrepresenting his jokes as racist.

After the Journal contacted Disney, Mr. Kjellberg wrote in a Tumblr post Sunday that he doesn't support "any kind of hateful attitudes" and understands "these jokes were ultimately offensive."

Mr. Kjellberg hasn't responded to repeated requests for comment on the videos.

After the Journal sent Google the list of nine videos that included anti-Semitic content, the company determined the videos violated its rules for advertiser-friendly content and removed ads from the videos. Google had previously removed ads from one of the videos within days of its posting.

Mr. Kjellberg's account pulled three of the videos after the Journal contacted Disney, but six others remain on the site.

YouTube hasn't removed any of the videos because it determined they don't violate its community guidelines, which have a higher bar for removal than its rules for advertiser-friendly content, according to a person familiar with the matter.

YouTube's community guidelines ban content that "promotes or condones violence against individuals or groups based on race or ethnic origin (or) religion." But in reviewing videos, the company says it also considers the intent of the creator.

YouTube said content intended to be provocative or satirical may remain online, but that if the uploader's intent is to incite violence or hatred it will be removed.

Write to Jack Nicas at jack.nicas@wsj.com

(END) Dow Jones Newswires

February 14, 2017 12:50 ET (17:50 GMT)

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