nScreenMedia OTT multiscreen media analysis

YouTube finally has credible competition

YouTube TV interface

Many people assumed that Google would remain unchallenged in the AVOD space. However, Facebook and Amazon are now offering credible competition.

The monopoly of YouTube in AVOD

When it comes to advertising-supported video-on-demand YouTube knows no equal. With over 1.5 billion unique viewers every month, YouTube is clearly the dominant platform. All other AVOD companies added together make up less than the Google-owned company’s share of the market.

However, all has not gone well for YouTube recently. Scandals involving extremist content paired with mainstream ads has led to the demonetizing of many creators’ videos. Many legitimate creators were inadvertently caught in the crossfire and lost some of, or all, their ad-driven revenue.  As YouTube continues to make changes to address the advertisers’ concerns, the lack of communication with creators continues to be a daily frustration.

The result is that many in the YouTube creator community are unhappy. Until recently, the creators had few alternatives to YouTube to make money. However, that situation could be changing as Amazon and Facebook jockey for position as a viable alternative.

The only thing that kills a giant is another giant

Some creators are opting for Facebook as an alternative to YouTube. Although Facebook doesn’t have an established revenue model for the average creator some, like Laura Clery, are making money. With seven-figure annual earnings, brand sponsorships and millions of fans, she is part of a select few that are participating in Facebook’s most recent advertising experiment. This ad program allows users to place 15-second ads in the middle of their videos.

Many have stated that Facebook’s play for YouTube’s business is not a serious foray into the area. They point to other times when the social giant has attempted to persuade YouTube influencers. For example, the company paid as much as $220,000 individually to top YouTube influencers to encourage them to post videos on Facebook LIVE. Though this effort was regarded as mostly a failure, in many ways YouTube and Facebook are growing more similar.

Facebook introduced its Watch tab and YouTube now allows users to share videos more easily. Both are investing in original programming as well. With more changes on the way, we can expect more overlap between the two tech leaders. However, there is another giant joining the social video party.

Amazon taking on YouTube

Amazon has announced a platform to offer publishers another place to distribute video. Moreover, publishers can start making money from day one.

Amazon Video Direct went live last year and many MCNs are leveraging the platform to drive larger revenues than through YouTube. Unlike YouTube, Amazon provides a dual revenue model for the MCNs. They receive a 55% cut of the ad revenue and 15 cents per hour streamed. Amazon also evenly splits all sales of products and revenues from the publisher’s profile.

In addition to Video Direct, Amazon is also rolling out new changes to convince influencers and merchants to create more video. Many people use YouTube for product reviews and recommendations. Amazon is going one better by allowing creators to make videos around products and to receive money for the number of videos viewed and the product sales those video views drive. This gives the creators more control and visibility into what their customers are buying, as well as giving them more money.

YouTube remains the dominant service for the average creator, but times are changing. Josh Cohen creator of Tubefilter, a site devoted to the online industry, said:

“As long as YouTube continues to be a place where creators can amass a large audience, it’s always going to be a draw until another platform can match its revenue dollars.”

Well in more ways than one… now they have.

 

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