Tuesday, March 28, 2017

The Simple Solution to YouTube's Demonetization Crisis

Entrepreneurship and hustle.  Entrepreneurship and hustle.


Christopher Ivey said...

Sorry Captain, but for once I disagree with your thesis. YouTube shares very few parallels with previous media because the platform owner controls your visibility in much the same way that the FCC controls access to airwaves.

The crisis isn't one of monetization, (except for those who are still by-and-large YouTube winners, like PewdiePie, but a crisis of loss of visibility.

Content creators on YouTube are unhappy because they are coming to terms with the fact that the YouTube ecosystem does not evolve organically. It hasn't for years, but the degree to which Google creates winners and losers has accelerated over the past 18 months.

Content can not go viral or even gain a high degree of visibility through organic processes any more. This process is only remotely based on popularity or organic dissemination at a very low (sub 100K impressions) level, and content creators can no longer organically grow their audiences simply by producing good content.

So there's no point in users trying to monetize their own content. They can't control its visibility and they can't guarantee impressions to their buyers. Trying to do this is like offering to sublet your space in the classified ads, or selling advertising on pirate radio: in most cases you can't offer consumers any upside that the real owner of the medium, (which is YouTube) can't. You might be able to get the local Uncle Buck's Army Surplus to buy a couple of mentions on your YouTube channel, but no serious advertiser will touch you with a ten foot pole: they want guaranteed impressions within the predictable duration of a campaign.

When the new standards "extreme content" many channels will simply disappear, and are only visible to those who are willing to sign in to Google - and coincidentally leave a permanent record of their desire to watch "extreme" content.

Is your content "extreme"? You'll never know until you disappear.

The real winners in the new monetization universe are content aggregators like WatchMojo, or organizations that can simply re-package and re-sell content that's already paid for, which is why the top lists are dominated by music videos, movie trailers, and highlight reels from late night comics and other network content.

Incidentally, this is just fine with Google, which is consciously trying to rebuild the old-time TV network model for the digital age. This means that they'll need to continue to increase control over, and homogenize the content they host. They have made a conscious choice to reward producers for content that's widely palatable; in excess of 10 minutes per video; and is renewed multiple times each week. Google wants viewers to watch YouTube the way they watch Netflix.

YouTube probably won't succeed in ever dethroning Netflix, (who actually pay to license or produce the content they show), but that's who YouTube wants to be.

This means that small video content creators have to look for other ways to get their content in front of audiences. Many have already changed their business practices in recognition of this fact. Corridor Digital, for example, has stopped producing feature videos for YouTube. Instead, they fill thei YouTube channel with outtake reels, office funnies, and talking head clips that require very little post production or effort, while selling their feature content directly to subscriber channels like Netflix and GO90.

YouTube used to be their platform; now it's simply another channel for promoting their product, like Twitter.

Political commentators, vloggers, and talking heads, who have hitherto had it pretty good, are going to have to get used to the fact that unless they're willing to change their content, their audiences are going to shrink instead of growing organically. They'll simply have to move their monetization efforts to another medium.

DocVinny said...

Here's what I see as an issue here. YouTube is both a platform and a brand, people look to YouTube to provide then with everything from stupid cat videos to news and political content, to how to videos on how to fix their cars. Whether there is value in associating with that brand, however, is questionable.

What, truly, do you NEED though? You need to be able host video on a server that can handle it. You need an embeddable player so clicking on a picture or link will result in your video playing. You need a way to drive traffic to your videos, and as you pointed out, my Captain, you need advertising.

Three examples: on a large scale Glenn Beck and blaze network. They didn't team up with YouTube. They teamed up with major league baseball to provide the technology platform. They built content their audience was willing to pay a few bucks a month to see, and built a network. What they're doing with it going forward is not the point here.

On a medium scale, there's CRTV (I'm thinking specifically Steven Crowder, promoting subscriptions with "the mug club") and the Daily Wire. Both are subscription models yet both also have commercials for sponsors.

There are other platforms besides YouTube, and as they restrict content they don't agree with and remove the financial incentive to create good content, that content can go elsewhere. All the tools are there. Find them and use them. As the content moves, so did the viewers and advertisers.. Remember MySpace?