Lost in transition: YouTube creators bristle over losing revenue to Facebook video

Facebook (NASDAQ: FB) may be helping to build an online video dream market for marketers, who now have another user-heavy option on which to place their ads, but for YouTube-based content creators, the social media giant is becoming a nightmare as lost views impact their revenue.

According to an NPR broadcast, YouTube creators -- many of whom make pretty good money on ad revenues earned from millions of views of their content -- say Facebook's video initiative "is taking money right out of their pockets" as Facebook users repost YouTube videos on the site.

For example, a Fullscreen MCN (multichannel network) member, Jack Douglass of jacksfilms, told NPR that when one of his videos was uploaded without permission by a popular Facebook group, the video garnered over 20 million views before Facebook took it down -- numbers that would have earned him $20,000 on YouTube. Even worse, because so many people had already seen the video, interest in it on his YouTube channel dropped to almost nothing.

Facebook does not yet have a program in place that would pay revenues to content creators. The social media site will test a very limited revenue-sharing program this fall with a few handpicked content owners such as Funny or Die, the NBA and Fox Sports, featuring the same 55/45 revenue split as YouTube, with some quirky differences.

It's also important to note that Facebook isn't directly ganking YouTube videos: rather, its users are finding content they like on YouTube, downloading it (via third-party download software) and uploading it to the social media site, rather than simply embedding a YouTube video, in a process dubbed "freebooting" by Hello Internet podcaster Brady Haran. However, creators are increasingly accusing Facebook of profiting from the trend indirectly: Page owners can rapidly build "likes" by having a video go viral via Facebook's video platform. And if the site adds pre-roll ads to videos in the future, those freebooted videos would start bringing in revenues to Facebook.

But the problem may be much deeper than even Facebook realizes. An Ogilvy and Tubular Labs study found that out of the 1,000 most popular Facebook videos in the first quarter of 2015, 725 were re-uploads stolen from other sources, according to a Digital Music News article.

Even though YouTube viewing time is up 60 percent year-over-year according to the company, that doesn't necessarily translate to more money in the pockets of individual content creators. And as the short-form online video market continues its transition onto social media platforms like Facebook and Twitter, those individuals are likely to suffer the biggest hit to their pockets as views and revenue share begin to fragment onto different platforms.

Other online video outlets for individual creators like Vimeo offer higher revenue splits and better visibility -- at least on their sites -- but do not have the reach of the biggest user-generated content outlets like YouTube.

For the short term, Facebook's concentration on attracting advertisers is a positive step for the company's monetization strategy. But long-term, the site's apparent lack of interest in helping creators both protect and monetize their content could result in a significant backlash should it try to duplicate YouTube's channel program.

"Creators have been yelling (apparently into a void) about this for over a year now," said YouTube creator Hank Green in a Medium article on the problem. He said that while YouTube solved much of its copyright issues by implementing its ContentID system, Facebook has no such protection in place to detect and block freebooted content.

"Facebook won't hold itself accountable, but maybe they will if we make them," Green said.

For more:
- see this NPR article
- see this Slate article
- see this Digital Music News article
- see this Medium post
- see this joint Ogilvy and Tubular report

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