• by June 6, 2014

YouTube plays a critical role in many digital content strategies, but the video site and platform has disadvantages that publishers need to consider. Although YouTube offers publishers the opportunity to easily reach scalable audiences worldwide, its lack of transparency and the amount of control it has over a publisher’s intellectual property are worth discussion.

The Trouble With YouTube

Publishers using YouTube as their primary video monetization service should know that YouTube’s Terms of Service grants them a license to monetize and distribute the content in YouTube’s desired interest, not the publisher’s. Users are also licensing to YouTube their copyrights, patents and trademarks, while forfeiting the right to distribute content without YouTube’s consent.

It’s also important to consider that the average revenue earned from pre-roll ads has declined due to increases in programmatic buying and an additional surplus of user-generated content. As a result, many premium publishers are left unsatisfied, unsure of what benefits they are receiving from YouTube for a 45% stake in their revenue. Other solutions like Vimeo are video-on-demand only; so most publishers looking to monetize their content are stuck looking for alternatives.

The Harsh Realities of Today’s Online Video Ecosystem

Publishers looking to host and monetize their own content may need dozens of partners. They’ll need a content distribution network, a direct sales team, ad exchange integration, an OVP, and more. This costly overhead is not feasible for most publishers.

The most popular and more cost effective alternatives like YouTube, Vimeo or Daily Motion provide reach, but publishers have little control over how their content is monetized, which can lead to branding issues. For example, contamination of a creator’s brand can occur when ads that are offensive or contrary to the creator’s affiliation run alongside the creator’s content if YouTube chooses to do so.

But because sites like YouTube have done an exceptional job building large volumes of traffic to their platform, many content creators will accept the lack of control they have on their advertising sponsors. However, publishers should not have a business model where they are driving traffic to a third party’s website that is not looking out for the publisher’s best interests. Most video platforms like YouTube are focused on keeping traffic on their own sites, not driving it back to the publisher’s site.

For publishers who are attracted to the reach of sites like YouTube, it’s important to know that only about 20% of video views are monetized. This is a fundamental flaw in many content distribution strategies that are focused on driving traffic to third party websites – spaces where publishers don’t control the monetization of their intellectual property.

Beyond the platforms that make scalable content distribution possible, the technologies and services that power the monetization of content have also changed. The rise of automation has also impacted the way video content is monetized. Networks and exchanges today buy ad placements as cheaply as possible, and generally are not aligned with the publisher.

These realities all point to an important shift in the market that needs to happen in order for video to stay profitable for publishers. Here are some ways to jumpstart that shift and build an effective video strategy fit for your content:

Build a content hub. Take advantage of the reach of sites like YouTube, Facebook and Twitter, and use them as a distribution and marketing network to build your audience through teasers. Drive that traffic to your site for full and premium content because you will have more control over how you monetize. Remain consistent with your releases so your fan base can know when and where to get your content, and make sure your distribution allows for consumption across all devices.

Control your ecosystem. Create a digital ecosystem where you—the content creator—have more control over the monetization of your content. Instead of relying solely on third parties and programmatic advertising for content monetization, ensure you have a direct sales team and custom advertising solutions to deliver higher revenue through ad sales. Better control over the relationship your brand has with your audience is key to success as a publisher.

Hold onto your intellectual property. Licensing is the name of the game right now in content distribution, but don’t just give a third party sole monetary control over your videos. Many video platforms have licensing agreements that rarely favor the best interests of content creators, and when they do it’s only for their top performers.

In order for this symbiotic relationship between audiences, content creators, and advertisers to improve, the market needs to be transparent. The future of content is leaning away from the viral and low quality production videos. Online video is finally maturing from cat videos to real content, and as advertisers continue to see this market growing, the content creators will reap benefits because content will always be king.