YouTube strikes back in increasingly important mobile video battle

No sooner does Instagram make its mobile video move than YouTube and Snapchat counter-attack in an area of growing commercial significance to telcos too.

Facebook subsidiary Instagram launched IGTV yesterday in a bid to wrest back some of the initiative in a mobile video space largely dominated by YouTube. In hindsight the announcement may have been timed to steal some of YouTube’s thunder, because just a few hours later the Google-owned giant announced a bunch of initiatives designed to keep its ‘creators’ loyal.

It’s no coincidence that we’re getting so many online video-related announcements right now because we’re in the middle of VidCon – a big event devoted entirely to just that. Traditionally it has been a convention of YouTubers, i.e. people who devote much of their time to creating video content and sticking it up on YouTube. Since its acquisition by Viacom earlier this year it seems to have embraced the corporate world more closely and this is reflected in all these announcements.

Monetization is a critical issue when it comes to user-generated video as kids increasingly aspire to make a living that way. The most successful YouTubers make millions, but traffic doesn’t always map directly onto revenue, with YouTube reserving the right not to serve ads on content it thinks advertisers might not want to be associated with.

The result of this approach is that creators are increasingly finding their videos ‘demonetized’, with no prospect of traffic being converted into money. YouTube seems to be aware how alienating this process is to its creators and has belatedly moved to appease them with some new tools to help them pay the bills beyond taking a cut of ad revenue.

In a blog Neal Mohan, Chief Product Officer at YouTube, announced its creators are earning more money than ever from advertising, but conceded the need to create other revenue channels, building on the Super Chat service it introduced last year that enabled viewers of a live stream to pay money in order to make their comments more prominent.

So now we have Channel Memberships, a premium subscription service that offers special access to the creator for five dollars per month. YouTube has also partnered with a merchandise specialist to assist creators with flogging branded tat to their viewers. Lastly there is Premiers, which aims to turn a pre-recorded video into a live event, thus unlocking the potential of things like Super Chat.

All this stuff is as much a response to alternative revenue-generation mechanisms such as Patreon, which is an easy way for anyone to pledge small regular donations to someone they want to support, thus bypassing the advertising channel, as to Facebook. There’s also Amazon-owned Twitch, which live-streams games and allows viewers to pay for premium virtual tat such as emojis if that’s what floats their boat.

The other big player in mobile video is Snapchat, which has been offering portrait-aligned video suspiciously similar to the IGTV announcement for some time. With much less fanfare it has just announced its Shows video format, which was previously only available to corporate producers, has now been extended to regular creators.

The only other major social media platform we haven’t mentioned yet is Twitter, but BuzzFeed reckons mobile video has been a key reason for the recent turnaround in its fortunes. If you had bought Twitter stock in August of last year you would have tripled your money by now and, alongside a focus on news, a general rethink and a healthy dollop of luck, BuzzFeed puts that down to an aggressive push into premium live video.

A visit to your Twitter stream typically finds sponsored video clips interspersed within the usual bile, virtue-signalling and twitch hunts. These could be ads, news clips, sports coverage. “Video is really really important to us,” Matt Derella, Twitter’s head of revenue and content partnerships, told BuzzFeed. “It’s our largest format in terms of revenue.”

All this is directly relevant to the telecoms industry as video continues to put enormous strain on networks and operators increasingly look to content to boost their ARPUs and become less dependent on traditional contracts for their revenues. Internet companies are becoming increasingly reliant on mobile video for their business models, which could create a host of new opportunities for telcos able to move quickly enough to exploit them.