Does Streaming Have a 'Commercial' Star?

Last week at its Brandcast event for advertisers, YouTube’s Robert Kyncl unveiled plans for six ad-supported series and an ad-backed Katy Perry special.

Most of the shows are very TV-ish, starring well-known TV and show biz names, like Ellen DeGeneres, Kevin Hart, Demi Lovato and Perry.

Kyncl pointed out, as if it’s a crisis, that less and less content out there is ad-supported. Now, about one-third of the content consumers see comes to them unencumbered by advertising. Just a few short years ago, just a tiny percentage were.

“We see these shows as a way to partner with you to buck this trend,” he told a crowd of a couple thousand ad buyers and brand execs.

So these new shows are YouTube’s super-courteous way of helping advertisers out. Very nice.

His observation is spot on. As NewFronts wind down, it becomes apparent that virtually every single well-known streaming hit--the kind of stuff whose stars end up on talk shows or chatting with Terry Gross on public radio--comes from Netflix or Amazon and is sponsored by... your credit card.



As television’s upfronts await, those big-budget network shows compete with a gigantic bunch of talented--and broadly unknown streaming stars.  Those TV stars are paid for by Procter & Gamble and Ford and Viagra because they know the TV stars and shows are promotable. But if a crossword puzzle asked: "Most subscribed-to YouTuber?" I don't think many would write in their answer with a pen. (PewDiePie, with 52 million subscribers.)

A year ago, I recall, watching Grace Helbig and Mamrie Hart, standing off to the side at YouTube’s Brandcast event, all alone, just looking on at the crowd of buyers who either didn’t know who they were or were not impressed with their star power to approach them. That would never happen to, say, the stars of “NCIS.”

Certainly, though, millions are watching online videos from all sources. But the sneer from the world outside is that a few million views of a three- or four-minute-long videos from any content creator, from Conde Nast to PewDiePie, really does not create a long-lasting impression, with viewers or advertisers.

The short video is for short attention spans. It is, almost by definition, not must-see stuff.  Online video’s next step has to be longer form.

That’s because streaming is becoming television’s next iteration, and it’s now attracting television’s defectors. A new report from The Diffusion Group’s cofounder and principal, Michael Greeson cites research that reveals 31.1% of the people who became cord-cutters did it in the last 12 months and totally, 52% who did it in the last two years.

And what led them to streaming was Netflix or Amazon.  “Spending $70+/month for service that provides 2X value seems odd when you can pay $10/month for a service with 1X value,” Greenson writes. “The calculus of today’s TV subscriber has been radically altered by the presence of SVOD services like Netflix.”

Likewise, I’d say, the migration of TV viewers to streaming videos, in big massive numbers, means the content and presentation has to change, too — and with it, the advertising opportunities. YouTube is smart to recognize that.
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