YouTube Didn't Create The Problem

Editor's Note: The following classic Video Insider was first published Sept. 18, 2013.

I have have been vocal on the shortcomings producers and publishers face when they build their business models entirely around YouTube (see my articles “YouTube Isn’t Enough” and “Monetization More Valuable than YouTube Views”). However, I feel that I need to make a clarification: The problem has never been YouTube’s.

YouTube at its core is the world’s largest video publisher, which extends itself as a marketing platform for content creators. The problem was created when content owners started relying on YouTube to be their everything: technology platform, distribution partner, revenue stream. YouTube simply wasn’t intended for this.

Still, it’s easy to understand how content owners ended up in this position. When you get a free platform that has an encoder, content delivery network (CDN), video player, ad monetization, analytics, and marketing tools, why wouldn’t you go all in?

Admitting you have a problem is the first step

To move beyond this mess, content owners must understand the choices that got them here in the first place.

Using YouTube for your complete technology stack –YouTube’s robust technology makes it a top choice for many content owners. However, the technology is made for YouTube and not intended for your off-YouTube growth. Sure, if you have developers or the knowhow, you can customize some of the player’s features to better match your brand, but even on Google’s Developer’s Page, it stresses bringing the “YouTube experience to your webpage, application, or device.”

That’s just the half of it. If you’re letting YouTube serve as your content management system, what happens when an OTT publisher wants to offer your content on its devices? How about when you want to build a stand-alone iOS and Android application to sell advertising without breaking YouTube’s Terms of Use (which doesn’t let you run your own ads when using its SDKs)? And then there’s ad serving and marketing directly to your viewers through email and retargeting campaigns. None of these things are available through YouTube.

Making YouTube your only distribution channel – Likely following the lead of YouTube channel owners who got their start on the platform — Smosh, JennaMarbles, Annoying Orange – many producers go into YouTube using it as their only content destination. A successful YouTube channel doesn’t automatically translate to off-YouTube distribution. Even YouTube expects you to think beyond YouTube. Yes, YouTube has off-web distribution, such as Chromecast, Samsung Smart TV, and iOS YouTube apps, but these channels are owned by YouTube. If you’re a popular channel, get onto Roku, create tablet applications for Google Play and iTunes, and work on your own web property.

Making YouTube your main revenue stream –Non-funded YouTube Partners typically only earn around $2 per 1,000 views at scale. To sell against your own inventory, you must meet the minimum price set by YouTube. YouTube takes an estimated 45% cut of the profits earned from its funded partners’ channels. Once you take into account production and other business costs, even breaking even seems hard to accomplish, leaving you with very little control over the economics of youYouTube relationship. When you have a platform and you’ve broadened your distribution, it’s time to learn how video monetization really works (VAST tags, revenue reports for 20 ad networks – get ready).

Why YouTube is a great marketing platform

YouTube provides a lot of analytics about your content, audience, and monetization. Sure, you don’t have the advertiser list or your audiences’ email addresses, but any information, even aggregate numbers and CPMs, can help jumpstart and continually enhance your business. This is why everyone has realized that YouTube is a marketing and research platform more than it is a distribution partner. Use your YouTube analytics to improve your YouTube presence and identify possible areas for success off YouTube.

It’s time for those in the industry to stop pointing fingers at YouTube and acknowledge that at least part of the problem is their doing. Get a digital video management system. Broaden your distribution by being on every platform out there. Diversify your monetization partners through direct sales, ad networks, and ad exchanges. Use YouTube data to enhance your initiatives and a platform to market your content and the largest publisher in your future “network.”

There are already leaders in the space who are paving the way forward. Instead of abandoning YouTube, they are building direct-to-consumer channels for its content to complement their YouTube success.

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