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Why YouTube’s Dominance Is Not (Yet) In Danger

Everyone from Facebook to Vessel is chasing YouTube. But can any of them actually take on the online video behemoth?

Why YouTube’s Dominance Is Not (Yet) In Danger
[Photo: Archive Photos, Getty Images]

To read any of the latest YouTube-related news, the online video behemoth is in trouble. Big trouble. Competition from newbie startups and more established digital players that are trying to steal a piece of the ever-expanding digital advertising pie are zeroing in on YouTube’s stars. How? With promises of advances, a better viewing platform and rev-share deals that are more appealing than YouTube’s notoriously unpopular 45-55% advertising split with its talent.

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According to a story in the Wall Street Journal, one of the biggest threats is from Vessel, former Hulu CEO Jason Kilar’s new startup. Few details have yet been disclosed about the company other than that it will be a subscription, short-form video platform and that Kilar has raised $75 million in venture capital. To beef up content before Vessel’s launch, Kilar is offering top YouTube stars “lucrative terms,” including an upfront fee based on how well content creators’ videos have performed on YouTube.

Then there’s the New Yorker story by Tad Friend, which begins by painting YouTube as the hot, new(ish) obsession amongst screen-devoted teens, one that has Hollywood desperately scratching its head as to how to mimic and tap into, but that ultimately posits Vine as the real winner when it comes to the future of teen viewing trends. In a line that was retweeted by Twitter CEO Dick Costolo, Friend writes: “YouTube’s primacy as the place teenagers go after school is already being challenged, especially by Vine.”

According to the Journal, these and other threats, from the likes of Facebook, Amazon, and Yahoo, have YouTube deeply unsettled and “in a fire drill” led by global business head Robert Kyncyl, trying to shore up talent. To this end, YouTube is offering its top stars bonuses if they sign multi-year deals in which they agree to post content on YouTube exclusively before putting it up on another service.

Bonuses are just the latest attempt by YouTube to win over its creators, a mission that has gained a significant amount of steam under the leadership of Susan Wojcicki, who took over as CEO of YouTube earlier this year (and whom we profiled back in September). To quell agitations over that dang rev-split, YouTube has instituted a tip jar that allows viewers to support their favorite video creators, and recently started making deals with top stars to fund new content and work with more traditional (i.e. Hollywood) producers.

But YouTube’s efforts to appease and work with its community to create better–and more ad-friendly–videos should not be confused with any loss of mojo. Nor should it be construed as desperate tactics wrought by an onslaught of competitors. Is YouTube nervous about the Vessels of the world? Most certainly. But is YouTube actually endangered by them? At this point: no.

As we reported in September, YouTube’s scale–over 1 billion unique visitors a month–is simply too enormous to engender any mass exodus. There is also the familiarity of YouTube and the communities that live and breathe there and that are resistant to jumping anywhere else. Statistically, only a very small percentage of YouTube viewers follow creators off the site. As one digital executive in Hollywood put it: “I think it will be very difficult to lure people away from YouTube. It’s less that people love YouTube and more that they have been there for six years and have built an audience. Changing viewer behavior to follow you somewhere else is not easy unless it’s too good to be true. I don’t see many creators actually jumping ship completely.”

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There’s also the money. YouTube’s parent company Google has a lot more at its disposal than anyone else which means it can keep tossing out carrots to creators. Facebook and Amazon are more real threats in this area, but they face the same challenge that Yahoo, another would-be YouTube, has been dealing with: they’re synonymous with an older demo that causes most YouTubers to roll their eyes (and think of their parents).

There’s no question that YouTube’s days as a monopoly are fading. But in the new constellation of online video platforms that is shaping up, for now expect YouTube to remain the sun.

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About the author

Nicole LaPorte is an LA-based senior writer for Fast Company who writes about where technology and entertainment intersect. She previously was a columnist for The New York Times and a staff writer for Newsweek/The Daily Beast and Variety

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