This summer, Yahoo plans to unveil a video service that will potentially rival YouTube. The company is targeting creators who are unhappy with YouTube’s overall system, particularly the ad rates and revenue sharing deals.
Currently, YouTube advertisers pay $9.68 per thousand impressions on average in the U.S. After that, Google takes 45% of the ad revenue. Creators upset with YouTube’s standard revenue split will find solace in Yahoo’s higher ad rate, estimated to be about 50 to 100% higher than YouTube’s rate, and in Yahoo’s more creator-favorable split.
To sweeten the deal even further, Yahoo will allow creators freedom from exclusivity in contracts. This means users can upload content on both Yahoo and YouTube’s platforms. Instead of fighting to be the only video service, Yahoo is simply trying to be the first choice.
Much like YouTube, creators can establish their own channel pages, host videos on Yahoo, and embed their content on other sites. Creators that sign on will also receive a publishing dashboard where they can distribute content through Yahoo’s many properties, including recently acquired blogging service Tumblr, as well as independent sites.
The company has been in communication with many video creators since the beginning of the year. They even recruited producers who were part of Google Preferred, an ad program that sells space on the highest-viewed YouTube videos. The idea here being that if Yahoo attracts top content producers advertisers will line up to buy space
The plans to build Yahoo’s video business have been in the works since Marissa Mayer entered the company in 2012. Last year, Yahoo attempted to buy DailyMotion, YouTube’s French equivalent, without success, followed by an attempt to buy Hulu. This year has brought on acquisition conversations with YouTube networks Maker Studios and Fullscreen
Though the anticipated revenue numbers seem promising, many creators are hesitant because they’ve already been able to make well over the average rates on YouTube. Some contracts also implied an availability for videos to be downloaded for offline viewing, another upsetting clause for creators.
Delays such as these which have pushed back the release of the service have driven video producers to question whether or not Yahoo has a clear plan for the program. Despite the setbacks, Yahoo’s video service could potentially be a new way for video content creators to increase their revenue online without ever properly leaving their spaces on YouTube.
[Source: Ad Age]