BIIShortVideo6BI Intelligence

YouTube has recently received a knocking in the business and tech press for its reported lack of profit and the massive video view-volume being achieved by competitors like Facebook and Vine and others, but profit and views are only part of the story. YouTube's advantages and challenges come into far clearer focus once they are considered from the point-of-view of the video-content creators.

YouTube’s ongoing popularity depends on its content creators: the personalities, media companies, and brands that make YouTube videos and upload 300 hours of video every minute.

Just as programmers and developers are the tail that wags the dog in mobile — they create the software that attracts audiences, fueling the rise of the most valuable apps and platforms — creators drive value in short-form video. 

It’s not a coincidence that YouTube has invested massively this year advertising its most popular personalities in magazines, outdoor, and broadcast and cable TV ads in seven countries. This was done at least in part at the behest of ad agencies, which complained YouTube was not doing enough to market its content and grow viewership, according to Ad Age. YouTube has also created a "Google Preferred" lineup of top channels with ad inventory that's sold directly to advertisers at premium prices. 

However, the online video space is changing as more brand money flows in. Brand sponsorships and product placement in particular are becoming more important revenue streams, and these are areas where YouTube's model begins to have much less of a clear advantage. 

YouTube's advantages

YouTube has five clear advantages, detailed below.

  • Content ID: A typical Google-style big-data fueled app that essentially matches content to a database of intellectual-property records so that the over 7,000 record labels and film/TV studios that participate can take a revenue share when their content is appropriated on YouTube. This means big media is aligned with YouTube, and brands don't have to worry about advertising against pirated content. For creators, it means they can do parodies of a popular song like Taylor Swift's "Shake It Off," without worrying about copyright takedowns. 
  • Flexibility: There are no time restrictions on YouTube video. 
  • Revenue-share model: Only YouTube shares a cut, typically 55%, of ad revenue with video creators and the MCNs (multi-channel networks), [...]