Content Creator Independence

by | Jul 10, 2013 | Video Programming Insights

Part 1: YouTube’s Identity Crisis

Originally Published on Viddler

By Zac Stockton

YouTube was the first place to share videos online. Unprecedented growth in visitors matched the growth in content creators as well as professional videos. Following its creation, YouTube altered its strategies to keep up with a changing online ecosystem. Both the strategies and ecosystem have very little in common with what existed in 2005.

YouTube now finds itself in a dynamic ported from television. Knowing the relationship between multiple-system operators (MSOs) and television networks can help clarify the ecosystem where YouTube now exists. A new network has to sign contracts with MSOs that will pay a fee per subscriber to offer a channel in that package. The networks then create and syndicate content to be shown on their channels.

In its early days, YouTube was set up like an MSO­—a large company that allowed content creators to cultivate their own brand identity and individual viewers. YouTube covers streaming costs and takes a share of ad revenue instead of paying per channel. But it isn’t a content creator; it’s a portal to other content and channels. YouTube’s beta channel program—built similar to the coveted a la carte cable model—is another move into the MSO market. Gone is the large monthly fee that subscribers currently witness under the crop of cable companies.

For most people, YouTube is grouped together with Netflix, Hulu and Amazon Prime; companies that syndicate content with a small amount of original programming; not a place for direct service. The companies staking a claim closer to MSOs are hardware companies such as Roku, Apple, Samsung, Microsoft (through Xbox One) and Intel. Each of these platforms has apps, essentially networks, which a person subscribes to individually. YouTube is seen as one of these apps that will have multiple fees for each channel under its umbrella. Meanwhile, Netflix, Hulu and Amazon all charge one flat fee.

So, this leaves YouTube caught between two worlds: a functioning MSO that happens to directly competes with networks. YouTube pays content delivery costs and development costs, while leaving content control to other channels. This leads to a somewhat muddled strategy requiring YouTube to have a brand, all while allowing their channels to have their own brands as well. A lot of this can be chalked up to YouTube’s rough pull out from a video sharing site to a site that needs to be profitable.

For those independent content creators leaving YouTube, it’s like jumping out of the nest. You’ll discover a world with competing strategies and no clear model of success. But fear not…

In the next chapter of this series, we’ll breakdown hurdles for content creators looking to strike it out on their own.



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