YouTube rules over the ad-supported online-video realm. As “Game of Thrones” teaches us, everyone wants to steal the crown.
Recent reports have cited several would-be challengers to Google’s dominance, including Yahoo and Comcast. Meanwhile, YouTube multichannel network partners like Maker Studios — which recently launched Maker.tv — and Fullscreen are developing initiatives to bring more audience to their own platforms, to better monetize their content.
But characterizing any of these efforts as “YouTube killers” dramatically overstates their potential to threaten Google’s entrenched position.
The barriers to entry of challenging YouTube may appear small. But it’s no mean feat to build a large-scale, worldwide video-streaming site. And with YouTube, Google has established a vast, well-oiled infrastructure and a brand with unmatched power.
When Google bought YouTube for $1.65 billion in 2006, it had a running start. The Internet company already knew what was required to run a massive, global Internet service. Google invested in building out YouTube so that it became the best place to watch and share video online — critically, adding tools and features for content providers.
Today, YouTube reaches more than 1 billion users worldwide each month — nothing else even comes close. “There’s nobody operating at the kind of scale that YouTube is,” said Chad Gutstein, CEO of Machinima, which runs most of its business on YouTube. “They’ve spent a lot of money on engineers, technology, the feature sets. It’s phenomenal.”
So what about all the stories that YouTube is going to face some big competition soon?
Yahoo’s efforts, for one, revolve around approaching YouTube stars and trying to persuade them to bring their talents to Yahoo exclusively, with a slightly more favorable ad-revenue split than Google’s 55% share to content providers, according to industry execs familiar with the company’s strategy. But YouTube creators so far have not been swayed, because of the site’s much bigger reach and proven track record.
Recent deals Yahoo has done — led by marketing chief Kathy Savitt, who’s running video content acquisition — have been for premium, TV-style programming, such as bringing back “Community” for a sixth season this fall through a pact with Sony Pictures Television.
Comcast also has been said to be crafting a “YouTube competitor.” But it isn’t anything of the sort. The project is about bringing on-demand partners like Havoc and Kabillion — and other niche content — to the Comcast X1 advanced set-top platform, rather than being about a foray into Web video. The MSO has not disclosed how many X1 subscribers it has, but it’s obviously nowhere near the worldwide reach of YouTube.
Meanwhile, there have been “YouTube killers” since before YouTube even existed. Those include Vimeo, created by a couple of filmmakers in November 2004 and now owned by Barry Diller’s IAC, and Metacafe, formed in July 2003. Both France-based Dailymotion and Blip.tv (now part of Disney’s Maker Studios) got going in early 2005, around the same time as YouTube.
There are also the ultra-short-form video-sharing services from Twitter’s Vine and Facebook’s Instagram. But today, those lack native ad capabilities — and at max lengths of six seconds (Vine) and 15 seconds (Instagram), they’re a totally different breed than YouTube. Facebook has added autoplay video capabilities to its website and apps; its main business, though, is enabling people to interact, not monetizing video content.
As for the moves by MCNs like Maker and Fullscreen to establish traction off-YouTube: Google has said it’s all for it. Content creators, YouTube execs have pointed out on many occasions, should always look for multiple avenues of distribution.
The actions of YouTube’s largest partners speak louder than words: Maker Studios is premiering episodes of Ben Stiller’s “Next Time on Lonny” (starring Alex Anfanger, pictured above) on Maker.tv, but showing them on YouTube the next day.
“YouTube is reaching the masses,” said one MCN exec, who asked to remain anonymous. “There’s a huge gap between them and the rest of the industry.”
Clearly, there’s room for multiple video services on the Internet — and they’ll keep YouTube on its toes. But a YouTube killer? Disregard the breathless headlines. It’s not going to happen anytime soon.