Commentary

To An Entire Generation, YouTube Is THE Channel -- And Content Creator

Of late, we've heard a very vocal minority complain about YouTube's value proposition to content creators. 

We’re now in the third wave of video-content producers.  The first ones like Pop.com or Pseudo were too early (no one had broadband).  The second wave, like Mania, Ripe and Heavy had to build their own infrastructure and invest in marketing while creating content and growing distribution.  The third wave included players like Revision3 and Next New Networks who sought to build their own destinations but ultimately gave up, relying on distribution wherever it made sense.  Over time, with YouTube emerging as the main platform in video, the distribution strategy evolved to being largely based on YouTube.  The fourth wave of creators are those who have the benefit of hindsight and bet the farm on YouTube.  It's a great strategy to scale, but obviously, it's not perfect.

Personally, the best decision I made was not relying too much on YouTube early on.  At a time when many popular channel operators on YouTube were sporting massive audiences but failing to stay afloat, we had a myriad of distribution companies who were clients, paying us licensing fees to access our catalog.  It was never going to scale the way other strategies might have, but it made sense then.

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Yet the worst decision I made was not betting more on YouTube early on.  I know, I just contradicted myself.

A simple Google search can yield what kind of revenue split and what kind of CPMs YouTube channels can expect.  Without a doubt, it's not ideal.  But the bottom line is that when you consider all of the moving parts that are required to come together to produce, publish and syndicate content, YouTube is arguably the best ROI option out there. 

Everybody seems to like competition until they lose.  At which point, they complain about the perceived injustices. In other words, if YouTube isn't cutting for you as a business, the problem may be rooted in the fundamentals of your business.   Maybe you raised too much venture capital.  Perhaps your offerings aren't differentiated enough for marketers to care.  The reality is, YouTube has actually become a safety net for most creators who would never be relevant enough (despite their possible size, audience, content etc) to marketers in an ever-more-fragmented media landscape.

I realize that the biggest mistake companies (be it media or tech) make is to believe their own PR. When a viewer subscribes to a channel, without a doubt the creator deserves a lot of credit; but failing to realize that to an entire generation, YouTube IS the channel -- and, at least implicitly and figuratively speaking, the creator -- is part of that mistake.

I don't recall anyone lining up to help Google defray the costs of YouTube early on when it was a money loser, or, for that matter, sign the $1.65 billion check required to acquire the site.  But now that YouTube is a profit machine and has helped Google become as dominant in video as it is in search, everybody's showing up, hat in hand.

YouTube's not perfect --  nothing is.  I sometimes wonder if the folks who launched Ripe (and went through $45 million in venture funding) would love to have had YouTube around in their era.  I then ask: are YouTube's critics willing to trade places with the earlier generations who had to worry about everything themselves?

To each their own, but I don't need to have lived in the Dark Ages to know that I don't want to have lived in that era.

It's tougher today than ever before to be in the content business -- yet we're in the golden era of content, too.  There I go again with the contradictions.

5 comments about "To An Entire Generation, YouTube Is THE Channel -- And Content Creator".
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  1. Walter Sabo from SABO media, July 22, 2013 at 12:50 p.m.

    All correct and all first presented to major brands starting in 2007 by the HITVIEWS marketing team. That is why our happy clients have included Pepsi, US Government, Timberland, TiVo, Microsoft, Logitech, FOX, CBS Television and many more.

  2. Paula Lynn from Who Else Unlimited, July 22, 2013 at 2:18 p.m.

    If it were a straight simple line to the finish line everyone would finish. Then again, there are more than one finish lines. As Yogi Berra said, "When you see a fork in the road, take it."

  3. Luke Mcdonough from AirMedia, July 22, 2013 at 3:02 p.m.

    Fair enough, as far as you go. But you leave out a couple of important factors entirely:

    1) Your post seems to assume that all YT creators are start-ups...In fact, a large part of the "vocal minority" you refer to is comprised of companies who have an established, non-web video content business, and who are trying to figure out how to extend their existing business online. Their gripe is simply that YT has no competition, and so the dynamic between "creator & distributor" is more lopsided with YT than it is in other markets. For these folks, your suggestions that perhaps they "raised too much venture capital" or that they "did not differentiate their content sufficiently for marketers to care," are not relevant one way or another. They are pointing out that the degree of audience concentration that YT now wields in online video does not exist in any other video market, and it has led to crappy terms for creators in YT's case.

    2) Let's also recall that content creators did far more than "defray" YT's costs when it was a money loser: They built YT's business, and got nothing for it. YT paid no license fees to the hundreds of commercial content creators who made up the bulk of its traffic for many of the early, money-losing years, and nor did they provide a useful way to stay out of YT's catalog until YT was well on its way. That free content drove YT's traffic to the moon, while some of the pioneers you refer to burned their cash by actually "paying" for content... And despite the role of UGC in YT traffic today, It was not UGC that built YT's initial traffic. It was largely TV content from companies like Viacom & NBC...kitten videos came later, after the audience & brand were established by user uploads of Comedy Central and SNL.

    As to your question about today's YT critics changing places with previous eras: I think they would say "yes:" If that meant going back to a time when, as a content creator, you had to argue with aTV network buyer about terms...but at least you had a dozen other viable networks to play them against. Ditto for film studios, pay-TV networks, movie theater chains, DVD retailers, and every other video distribution market we can think of...except ad-supported online video...

    You are right: It was impractically difficult for the pioneers who had to not only make the content, but also build the plumbing and the audience...But today's circumstance is no better: We have gone from "no" large-scale distribution partners to "one." That is just a different flavor of awful.

  4. Ashkan Karbasfrooshan from watchmojo.com, July 22, 2013 at 4:11 p.m.

    Luke, my unedited submission actually addressed your first point: "YouTube has succeeded the way Google's AdSense succeeded: it's like a drug. The following may not make sense for a venture-backed company aiming to become the next billion-dollar exit, and it may not make sense for a media organization that has a battalion of salespeople and its owned-and-operated properties. But wishing for a different set of circumstances is not a strategy."

    As per your second point, we have 2 businesses now: YT and the Rest of Web, with each doing about 50% of our views. Bottom line: my point was those who focused on ONLY one will have a hard time.

  5. Diana D'Itri from IDR Broadcasting, July 22, 2013 at 4:14 p.m.

    Love the contradictions. It just confirms that no one really knows. Since 2002, my little web broadcast company has survived by being nimble and quick to adapt. No one could've seen where trends would take us back then when FLASH was the newest and greatest technology for streaming.
    Those video producers who came to web market later have no room to cry foul on YouTube as stated in this article. As a personal investor and early adapter before youtube, I've paid my dues, still standing, and learned the hard way that video production/marketing is still anybody's game. youtube is definitely a friend because it legitimized web video for business marketing. That's good for everybody's business.

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