Yahoo’s Tumblr Enhances Video Player, But It’s Still No YouTube Killer

Tumblr, the micro-blogging site Yahoo acquired last year for $1.1 billion, has rolled out new features to make itself a better home for video. But despite speculation that it’s aiming to become a rival to Google’s YouTube, Tumblr still has a long way to go before it can credibly challenge the Internet’s No. 1 video site.

On Thursday, Tumblr announced several enhancements to its native video player. Those include: video autoplay on web and mobile (when on Wi-Fi); continuous video-looping a la Vine; a pop-out video player; and a “floating” video window that docks to the right allowing users to keep scrolling through the dashboard while continuing to watch the video.

Tumblr’s stepped-up video strategy supposedly encompasses a bid to lure YouTube creators to the platform, per a BusinessInsider.com report earlier this month.

But in reality, Tumblr’s expanded video play is more a defensive move to keep pace with more direct competitors like Facebook’s Instagram and Twitter’s Vine (and, it’s worth noting, Tumblr supports video posts from each of those services).

A critical point is that neither Tumblr nor the other short-form video destinations has an ad-serving infrastructure like YouTube’s well-developed advertising network for compensating creators for their content. Tumblr doesn’t offer any capability to serve ads in user-generated video content currently. So it’s a stretch to believe YouTube stars will be interested in jumping to Tumblr, especially given that they’ve built up their large audiences on YouTube to begin with.

The monetization piece of Tumblr’s video push has to do with branded material posted by marketers: “As one of our seven posts types, advertisers have always had the ability to use video for their sponsored content on Tumblr and we can’t wait to see what they do with this update,” a rep said.

While Tumblr claims video posts have been growing twice as fast as photo posts, it declined to disclose actual numbers of views in each category.

Wall Street analysts have been critical of Yahoo’s Tumblr deal as failing to produce any significant revenue contribution in the 15 months since the acquisition closed.

Yahoo CEO Marissa Mayer, on the company’s earnings call Tuesday, defended the Tumblr deal by citing its strong user growth, with the number of unique users up 40% from 300 million to 420 million since the acquisition. Yahoo expects Tumblr to top $100 million in advertising revenue in 2015, she said — but, of course, there’s no guarantee that will actually materialize.

Tumblr has taken steps to make the platform a more attractive outlet for media companies. Yahoo earlier this year hired former CAA agent Sima Sistani to head up partnerships with media and entertainment companies.

To date, Tumblr has executed promotional campaigns with entertainment partners including NBC’s “The Voice,” Lionsgate’s “Hunger Games,” AMC’s “Halt and Catch Fire” and Viacom. According to Mayer, more than 260 of “the world’s top brands” are now posting to Tumblr.

But however much traction Tumblr is seeing from promotional campaigns, it’s nowhere near YouTube — projected to gross $5.9 billion in revenue worldwide in 2014, per Jefferies & Co. — and won’t be approaching that anytime soon.

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