YouTube Gets Tough On Content Creators

YouTube CEO Susan Wojicki’s stated goal to move beyond the ad-funded content model for the world’s largest video site is nearing fruition. YouTube has drafted new rules for its partners - content owners- that are scheduled to come out later on this year. The gist of the new rules is effectively to compel content creators to opt into any new monetized services the site may choose to launch. YouTube’s most straight-forward way to do this is to create an ad-free paid subscription service for its users. The most viable way of persuading its visitors to start paying is by bringing to the fore YouTube specific content. With Native Creators channels accounting for 26% of YouTube views and additionally showing the strongest category growth this is a logical sector to focus on monetizing.

Under the new rules, YouTube Partners will now have to agree to have clips from their channels made available on this ad-free service. The onus is on Partners to opt out of this default position and the only way that they can do this is making their videos private, which means that their videos effectively become invisible on YouTube searches.

The Conflicting Demands of Online Video Content Platforms Versus Creators

Clearly these new rules create a potential divergence of interest between YouTube and its content partners. Converting free users to paying subscribers is always going to be a significant challenge. The pull factor will be greatly enhanced by having YouTube stars as a part of the package, but will it be enough?

In an increasingly competitive and diverse on-line video landscape content creators however now face a range of differing ways to monetize their product including exclusive windowing content deals. As such they many not be in a position to allow for premium monetization of their video clips by the new YouTube service. Their only alternative option then is to hide their YouTube channel accessibility to comply with the new YouTube rules.

YouTube’s Creator Dilemma

These new rules effectively create a binary choice for content creators on YouTube. Either agree to being part of the site’s new premium strategy, and lose exclusivity on content, or maintain control over content rights but be forced to seek alternative platforms to continue to build their brands.

YouTube finds itself in dilemma. Due to the success of its free ad-funded model, the site has given birth to a whole new category of video brands, who are celebrities, content creators and producers all rolled into one digitally savvy package. However YouTube now faces dramatically increased competition from well positioned start-ups intent on generating revenue from these very same emerging stars. Vessel’s promise of subscription revenue on top of ad income to YouTube creators is a compelling proposition and YouTube has been forced to respond in kind. It simply cannot afford to lose its native creators. Yet to ensure there is meaningful subscription revenue YouTube will have to impose a pretty robust paywall and doing that runs the very real risk of alienating the core free audience. Not doing so how ever risks seeing native creators disperse towards more flexible and accommodating video platforms.