YouTube Is Like Kleenex (or, Why YouTube Will Always Win)

/ Feb 26, 2015

YouTube

This post was originally written for The Jungle, a weekly newsletter about the business of YouTube. Subscribe here.

By Sarah Ullman

Let’s debunk the idea of a “YouTube competitor.”

1. YouTube is like Kleenex: Its brand name is used to define the entire product category of digital, short-form video. In the same way “to search on the internet” is “to Google,” a digital video creator is known as a “YouTuber.” “Content creator” is preferred by many, but that’s really industry jargon rather than a consumer-facing label.

2. YouTube’s challengers usually involve a “windowing” strategy in which creators post exclusive content on their platform for a specific time period before then uploading the content to YouTube. This means that YouTube’s competitors have also integrated YouTube into their business models. It’s very counter-productive to place yourself in total opposition to a platform that is integrated into the way you do business.

3. Global audience aggregation. Google’s infrastructure is too well-established for any meaningful UGC challenger. The scale of the platform is unassailable, both in terms of audience reach (more than 1 billion users) and creator community. There are 300 hours of video are uploaded to YouTube every minute.

4. YouTube is currently the only social media platform that monetizes for content creators (re: paying content creators, Facebook is “not sure how that would work.”) The 45/55 revenue split is much maligned; Google argues that it’s paying for infrastructure, servers, etc. Another result of the barely-sustainable revenue split? Creators build businesses around their audience on the YouTube platform. They use the platform to sell, to share, and as a conduit to other revenue streams (merch, brand deals, live events), thus placing YouTube in an “anchor” position at the heart of their brand. If the split was more heavily weighted in favor of the creator, creators might not feel the need to integrate YouTube so seamlessly into their business models.

Please don’t misunderstand me; I firmly believe that Vessel, Vimeo, Facebook, the Fullscreen OTT platform, etc. have a vital and vibrant place in the YouTube ecosystem. Vimeo is a great example; its niche brand as the YouTube for filmmakers or cinematic video has been proven to be quite successful. Even Vimeo, however, is reaching out to YouTube-native creators (at Maker and Machinima) to expand its user/revenue base. Facebook can notch excellent viewership numbers but their search function is nonexistent. Maker.tv was never intended to compete with YouTube because it isn’t a UGC platform, but rather a premium content destination site for its current partners. Each of these YouTube “competitors” lacks an element that is crucial to YouTube’s success.

The answer, of course, is not to challenge YouTube by copying it–because YouTube will always win. There is certainly money to be made in building a video platform that coexists, supplements, and feeds off of YouTube. However, the idea that a platform can ever match the YouTube Goliath in terms of scale, audience, monetization, and brand awareness is a false one.

Your thoughts?

newsletter_header FINAL

BrinsonBanks_Sully_027Sarah Ullman (@thesillysully) is a writer and creative consultant focusing on the YouTube ecosystem. She writes a weekly newsletter about the business of YouTube called “The Jungle” (subscribe here) and specializes in helping “traditional media” clients transition to the digital landscape.

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  • John Rhoads

    Major threat possible from company that vertically integrated Abbas better solves the monetization problem/story.
    OTT + TV+ Cinema + merchandise
    Gotta look at the economics of the whole pie.
    Cartoons sell cereal and lunches

  • idavidbw

    Great analysis. Two caveats:
    1) Facebook has a monopoly on the social graph which gives them exclusive access to what may be the most valuable data for targeting content and advertising; Google knows this which is why they did G+ and continue to treat Facebook as a mortal enemy. Facebook has just started dipping their toe into digital video. They are an insanely smart and disciplined company. They bought Liverail, a top video ad network (and Atlas). The chess board is taking shape. When they’re ready to release a standalone video service, it may be the first the real competitor YouTube’s ever had.
    2) Just as the AOL kids of the 00s needed a platform to graduate to (MySpace/Facebook), so it is with YouTube’s core audience. Google should do a new brand or at least an extension, but fears cannabalization – has innovator’s dillema. Competitors do not. But most are focused on content while community/social/curation are the keys to victory.

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