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Can Youtube become the next big Streaming Service?

Youtube has been an interesting niche in the media ecosystem. What once started as amateur videos by outcasts has become the video platform of the Internet and one study calculated 13-24-year-olds watch 4 more hours of Youtube than conventional TV per week.

You can’t deny that it’s a key cog of the media machine. Therefore, it’s reasonable to begin wondering what that role is. It’s easy to distinguish Youtube from traditional TV as they are individuals or small groups of people creating non-scheduled content under different conventions. This is reasonable on a surface level as it’s clear the bizarre and absurd comedic videos or the vlogs of fashion gurus or the vast arrays of video essays and documentaries that have thrived on Youtube is incompatible with TV as we understand it. After all, the medium is the message, so Youtube’s structure shapes the type of content that can be delivered to wide audiences for consumption. But the bottom line is that they are both visual content mediums, which require similar skill sets i.e. writing, acting, camerawork, and editing and the main source of revenue is adverts.

For many who hadn’t built a sustainable career off Youtube, diluted profits for an already low paying source of revenue directly threatened their financial security

However, adverts aren’t the goldmine of revenue they traditionally have been for TV. An interesting video by CGP Grey about Youtube advertising estimated that, on average, the creator gets roughly 1/8th of a cent per video. For most YouTubers who don’t consistently hit millions of views per daily/weekly video, the view: money ratio makes vlogging an unsustainable career even before considering the mercurial nature of the medium. This was why the ‘Adpocalypse’ became the crisis it did for Youtubers; for many who hadn’t built a sustainable career from the site, diluted profits for an already low paying source of revenue directly threatened their financial security. It may sound incredibly pretentious, but it really is an apocalyptic event for the people who eke out a bare existence from Youtube videos.

This changes the behaviour of Youtubers and the dynamics of the platform itself who will turn to other sources of income and look to maximise their production. For Youtubers who don’t have the brand recognition to sell merchandise and other products, they can turn to companies willing to sponsor videos in exchange for an advert by the creator in the video as well as set up patreon accounts for anyone to pay a monthly donation to Youtubers. And more radical concepts have been envisioned such as licensing. The most glaring example was ‘React World’ – a botched attempt to license their brand across the platforms many channels. It failed due to the terrible logistics of their concept and a terrible understanding of what their brand was, which led to users believing they had nefarious intentions to create a pyramid scheme and drew widespread criticism and ridicule. However, at its core, the Fine Brothers wanted to license their brand just like most successful reality TV shows, even bringing up the example of Britain and America’s Got Talent in their original announcement as examples.

A precedent has been set that opens the possibility of the cream of the Youtuber crop developing quasi-media empires

Or consider John and Hank Green – two of the most wholesome and recognisable figures to come out of the idiosyncratic culture of Youtube. What was once a year-long project between two brothers to keep in touch is now a company called Complexly hosting an umbrella of educational Youtube channels including Crash Course and SciShow. Even though the Green Brothers run a public education empire rather than a conventional media company, the principle of running a conglomerate of Youtube companies has been set. It’s a small and natural progression for many YouTubers who have multiple channels – a second channel for less official content, or a streaming channel. A precedent has been set that opens the possibility of the cream of the Youtuber crop developing quasi-media empires of their own much like wealthy actors who form their own production studios.

YouTube Premium (formerly Youtube Red) is the most fascinating development to come out of Youtube. It’s a system where, for a £12 subscription fee, videos become advert-free, gain the ability to download videos to watch offline, and access to Youtube Originals – exclusive content made by creators and paid by Youtube. The parallels to TV streaming, and cable TV are palpable. Netflix’s Original Series or the flagship shows of the BBC, HBO, Fox etc become a series of videos created by Youtube personalities. And unique to Youtube is the vlogging personalities who have a personal connection with their audience that conventional TV cannot replicate. The incentive for Youtubers to create content for this service is that they’ll have access to greater production values and more resources. Youtube pairs the personalities alongside professional producers to support the logistical changes of creating a conceptually consistent series of videos and receive a 55% share of the more reliable subscription income source. And Google’s 2012 YouTube Originals which divvied out $100 million to 100 channels for Youtube exclusive video content points to long-standing ambitions.

Given that Google don’t have a flagship streaming service, it’s logical for them to enter this lucrative market and exploit an untapped well of popular media personalities

The attraction is clear when considering the context of Youtuber’s struggles to develop a sustainable long-term source of income, with Pewdiepie explicitly saying that the consequence of Adblock and concerns about advertising revenue for smaller channels have been Youtube Red. And to cement it, the service is co-producing and distributing conventional TV dramas such as ‘Step Up’ alongside the Youtube based content. Given that Google doesn’t have a flagship streaming service, it’s logical for them to enter this lucrative market and exploit an untapped well of popular media personalities. As Google navigates this new marketplace, we must remember that tools are there for Youtube to develop a novel streaming service. Watching this unfold will be a fascinating test that could be another seismic wave rupturing the medium of television.

 

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