Behind The Streams The Video Revolution Is Upon Us And The Deck Is Stacked Against You
    • FRIDAY, APRIL 29, 2016

    • Posted by: David Moffly

    In the video space, it has been a busy couple of months. Mergers, acquisitions, new channels, announcements on blast; it is all happening so fast you really need to a scorecard in erasable ink to keep track of everything.

    Our very good friends at Complex Media recently completed a joint venture with Hearst and Verizon for a rumored price north of $250 million dollars. The acquisition was positioned as a video play, Rich Antoniello's announcement quote was "Since honing in on video, weve proven our ability to create culturally relevant, premium video content at scale in a very short amount of time."

    In an attempt to wean itself off of YouTube, Fullscreen (owned by Otter Media; a JV of ATT and The Chernin Group) launched its own full subscription video channel this week. You might have also heard of a couple of huge telecoms elbowing their way into the media space, partnering with seasoned media heavyweights to get it done. Verizon has been spending money like a drunken sailor of late, pumping cash into its GO90 mobile much so that they just brought someone in from Comcast to get control of the spending. The telecom also just announced that it bought 24.5% of Awesomeness TV; an MCN owned by Dreamworks, whom if you're real up on the news, was just purchased by Comcast. That's quite a corporate grip on an MCN you may or may not have heard of.

    And then there is Buzzfeed, who is rumored to have missed their sales projections (by 250 million...or upwards of 50%) due to its viral copy efforts no longer being effective. There's also a bit of a war brewing between Buzzfeed's video and editorial teams (a kind of Millennial, East Coast / West Coast version of a Hip Hop war? Who knows...).

    OK, and while we're at it, let's talk about Vice Media (the current kings of the space) who have guzzled down an astonishing $770 million in venture capital and private equity in the last several years and have built their own media empire that now encompasses their own cable channel (PS - Has anyone actually watched this channel?).

    Your head spinning yet? It should be.

    It's all happening for a reason: video and positioning to be on Millennials endless, digital dial.

    It is safe to say that the editorial web is a terrible place to be. It might be easy to point fingers at the culprits, but the honest answer here is that everyone has had a hand in editorial's demise. Reading anything on the web feels like one big attack ad vainly trying to get a click out of the user with a little editorial copy on the side. Sites like Business Insider have so much ad code on their pages that the site crashes computers / connections. It's so unbearably slow as it harvests every little bit of data it can from your browser. Ad Rates are terrible, driven by programmatic bots racing to drive the price ever downward and ad blocking is now (sadly) standard (it's called stealing the web people!). In short, writing is dead on the web and we killed it.

    Video is the new panacea...maybe. So if you're an aspiring video baller where you gonna go with all that great and expensive video your teams are producing at lightning speed?

    Let's look at the main players sitting at the video platform table. YouTube, Facebook and Snapchat are consuming all the media attention at the moment.

    At 11 years old, YouTube feels like the adult at the table. Their platform a complete offering; Desktop, OTT, Mobile and a legion of engineers figuring out whatever comes next. Facebook, with its 1.4 billion monthly active users, is the new gorilla in the room, but it has no monetization and its main vehicle, the News Feed, now feels like a visual shout fest with all the social videos packed into your feed to scroll through. Don't you get a surreal feeling of being in a Harry Potter movie where all the art on the walls and the Daily Prophet waves at you for your attention? Snapchat owns the teenagers and video is a huge part of the experience but what are they watching? Video selfies of their BFF's or mass amounts of video from the Discover section? User generated content is also being culled from large events like music festivals and sporting events for "Snap Stories" and being re-broadcast as sponsored videos with no regard for copyright or privacy (welcome to Millennial generation reality). The days of releases and permissions are long doubt buried somewhere in the Terms of Service docs that no one ever reads.

    Are any of these three platforms good business partners for all of the money now being pumped into video? Are you ready? NO...NO they are not!

    youtube logo

    YouTube is ubiquitous and a powerful monetization engine for a select few, but for the masses it is a company obsessed with growth and a dominating presence on every channel / device. Your precious and expensive video programming is just fodder for YouTube's continued expansion. YouTube also stacks the monetization deck completely in its favor. It makes the rules, it sets the rates and it decides when ad calls get filled. Even the largest YouTube networks must only be barely profitable if at all but they make up for this losing proposition with "scale."

    There are quiet but seriously tense negotiations going on between the major music labels and YouTube over renewals and the word from the frustrated label side is that YouTube just doesn't care about monetization, they are about scale and reach first. Would you want a platform partner that sets all the rules on how you can make money but is really only concerned about scale? We wouldn't (which is why we built our own). Vevo (Sony Music and Universal Music) and Dailymotion (owned by Universal Music Parent Vivendi) are the secret aces in the hole here. Vevo is a complete platform, built at great expense, though the vast majority of its revenue is earned on YouTube.

    facebook logo

    Facebook is so busy leaning into muted auto play video that the News Feed is killing the overall experience. Venture dollars are flowing into whole new businesses aimed at creating snappy short "Viral Videos" for the platform. The race is for audience and scale. A couple of points here: It's not your audience. And do people not remember the YouTube/Google SEO driven content farm, Demand Media (aggressively shrinking and selling assets as we speak)? So go ahead: pick a platform partner with immense scale but no monetization. I think you'll find that FaceBook doesn't care if you or your brand make money. While Facebook Live is supercool and very helpful in collecting an audience, again to what end? You have no idea who the audience is and no way to reach them again.

    snapchat logo

    Finally there's Snapchat...a platform everyone over the age of 25 is proud to boast they don't understand. Meanwhile, everyone under the age loves it...which makes it the kids table, which makes it hard to be ignored. The usual cool kid video suspects live in the "Discover" section. But honestly, is "iHeartradio" cool? The real gold here is in monetizing event driven content. No cost of creation and no cost of audience acquisition. BOOM. But unless you own a major event (Coachella, The Super Bowl, etc), Snapchat really isn't a video platform that's going to do anything for you. The company's CEO Evan Spiegel is a current Steve Jobs wannabe, creating a global powerhouse with a product that no one actually needs but are eager to obsess over. And how about this for an interesting conspiracy theory side note: Are they really building the world's largest facial recognition database and turning it over to the NSA? THINK ABOUT IT.

    So what then is the answer if you are a video powerhouse to be and want to place your precious content that was extravagantly produced? Facebook and YouTube will never deal you a fair hand. And good freaking luck finding success with Snapchat. So that leaves one (rather painful) option: BUILD YOUR OWN! We did. It has been a long and very difficult accomplishment, but has Baeble placed perfectly for the video revolution. Verizon and Fullscreen (who are owned by ATT) are also on the right track and most likely in it for the long haul.

    You own the video, why not own the monetization and audience?

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