A few days ago Channel 4 announced that it was pulling all of its long-form content from YouTube. While the statement was diplomatically worded, the message was clear — YouTube simply wasn’t delivering the kind of revenue and cross-promotion opportunities that 4oD can enjoy on its own sites and apps:
To make the best of this investment, we’ve decided to focus on bringing online viewers of our full-length shows to our own 4oD apps – such as those on iOS, Android and channel4.com. These apps also allow us to encourage more viewing by recommending programmes we think people will appreciate, and to provide viewers with additional services.
This isn’t a knee-jerk reaction or a failure on Channel 4’s part to give the experiment sufficient time. 4oD have been posting long-form content on there since 2009. But times have changed. While Channel 4’s decision was undoubtedly, as they say, an economic one, it seems likely that other strategic considerations were factored into the decision. Here we take a look at how the dynamics have changed between YouTube and big media, and how the video platform’s massive growth is making its platform proposition less attractive for large media companies.
Major Media Companies Are Less Dependent on YouTube in App-Based Environments
All these years on, YouTube continues to be the ‘go to’ destination for video on desktop computers. YouTube videos are ranked more highly in Google search results, are embeddable, are browser friendly, and channels can be discovered and subscribed to within the platform. YouTube have also led the way on mobile, and for a few years it was consistently providing a significantly better and more reliable user experience than pretty much anyone else in the market.
However, as major broadcasters and operators have invested more in developing their mobile delivery, apps and websites, they have been reclaiming some of the ground they lost in the early days. The same thing is happening on TV, where — generally speaking — it’s usually more convenient to use a broadcaster’s app than to seek out that same content on YouTube. And as Channel 4 imply in their statement, it’s simply more profitable for them to redirect users to an environment where they retain control over pricing, the context and the cross-promotion opportunities. Then there’s also…
While the tech giants have been leading the way when it comes to data-driven advertising, many broadcasters have been busy developing their own solutions. In doing so, they’re also starting to truly appreciate the value of their audience data. So it goes without saying that handing over your first party data to YouTube — a media competitor and one of the most data-savvy companies on the planet — is best avoided if possible. Even allowing YouTube to learn what does and doesn’t work on there in terms of long-form content is bordering on reckless. And as time goes on, data ownership will be continue to become one of the issues most likely to fracture Google’s relationships with its media partners.
YouTube is Still Regarded By Many as Being a ‘Kind of Premium’ Environment
For some, the question of whether YouTube is a premium environment or not is still a contentious issue, although with $5.6 billion in revenue coming in each year, it seems unlikely that too many people in Mountain View are losing sleep over it. However, it is an issue for big media brands partnering with YouTube.
The confusion about YouTube’s status even extends to resellers of YouTube inventory, who will often pitch the product using language along the lines of ‘We have access to YouTube inventory…’ before following that up with ‘…which we regard as premium’, forgetting that sellers of truly premium inventory don’t try to reframe the concept of premium to prove its worth — it should be self-evident.
This is always going to be a problem for Google. No how much YouTube spends on premium content, it’s always going to be tainted slightly by the fact that: (a) more often than not, user-generated content (UGC) is poor quality; (b) the social nature of the site has a negative impact on the site’s look and feel; and (c) a significant chunk of the active community is composed largely of teenagers with full commenting rights.
The Social Contract Has Broken Down
It’s important to stress that these sort of challenges are by no means unique to Google when it comes to forming media partnerships with big media. All of the major social networks have approached their publishers and broadcasters in a similar way. Whether it’s Facebook, LinkedIn or YouTube, they all presented themselves as media platforms through which third parties can reach new audiences and reconnect with existing users.
When the hysteria around social media was at its peak, this was an attractive proposition to struggling media companies. However, those same companies soon realised that today’s social partner is tomorrow’s audience gatekeeper. The owners of social platforms have to eat too, and as soon as they sense they’re standing between you and your audience, all of a sudden you’ll find they’ll want to charge you for access to what was once ‘your’ audience.*
The Future of YouTube as a Platform
As things stand, it’s difficult to see many more large media companies handing over their long-form content to YouTube. Even the multi-channel networks (MCNs**), many of which started out on YouTube, are keen to flee the nest as soon as they when they get the chance, as evidenced by Maker Studios’ decision to acquire Blip last year. Pretty much every media company now realises that one of the biggest threats to any digital media business is becoming overly reliant on third party platforms or technologies pose as much of a risk as competitors do. The chances are that in a few years it’ll be looked back on as a naive experiment, but one that enabled them to provide a reliable streaming service while they put their house in order. And then YouTube also benefitted by acquiring a little street-cred as a destination for long-form content, not just the oft-maligned cat videos.
YouTube will be just fine of course. They’re already making huge money, are continuously finding new revenue sweet spots, and there’s every chance they’ll get their long-form strategy right in the end. In time, big media’s flirtation with YouTube may come to be regarded as a naive experiment, yet the arrangement acted as a stop-gap solution for both parties: traditional media companies were able to use YouTube to provide a reliable streaming service while they honed their own services, while YouTube earned some badly needed credibility as a destination for long-form content, not just those much-maligned cat videos.
*The chances are you have seen this same process happen at the user level. For example, if you own a Facebook Page that once enabled people who liked it to see your updates, you now have to pay for them to see update. LinkedIn are also charging users to post updates that are visible to more than a handful of their connections.
** Multi-Channel Networks (MCNs) are companies that affiliate with multiple YouTube channels, often to help with programming, funding, cross-promotion, partner management, digital rights management, monetization/sales, and/or audience development. Most tend to be focused around a vertical and/or demographic with large, targeted audiences for programming, distribution, and sales. MCNs often enter into contracts with their channels under which the MCNs are entitled to keep a portion of the advertising revenue generated by those channels.Video@Dmexco - Watch the highlights: