By Samantha Bookman
When Maker Studios was sold to Disney for a record $900 million (if the final payout holds), the gauntlet finally was thrown down on how much investors and media giants would be willing to spend on multichannel networks, some of the newest disruptors in the online video space.
There was only one catch: MCNs are part of YouTube's website, and not offered anywhere else. While this doesn't necessarily limit media companies from promoting and creating popular content, some are reportedly balking at the idea of paying big dollars when YouTube gets the majority of views--and a big chunk of the advertising revenue.
It wasn't until September that Fullscreen was acquired by Otter Media, the AT&T-Chernin Group joint venture, for a reported $200 million to $300 million sale price. The deal took place months after Fullscreen revealed it had hired an outside firm to explore options for being acquired and after it was rumored that Time Warner Inc. backed away from a potential acquisition.
Ad revenue sharing on YouTube. (Source: JW Player, The Future of Online Video: Multi-Channel Video Strategy, March 2014)
But it's not just the big players that are looking for a way to increase their share of revenues. For smaller MCNs and for individual content creators, YouTube is a challenging space to turn a profit.
Google's video giant takes a 45 percent cut of content creators' ad revenues right off the top. Multichannel networks then take a cut from their members, leaving individual channels with as little as 33 percent of ad revenue in many cases. Furthermore, creators have limited control over the types of ads that display over their content, which can drive down clicks and earnings.
Enter the next generation of online distributors: companies that are providing ways for content creators, from large enterprise-level MCNs to individual producers, to post and publicize their videos beyond YouTube.
Vimeo is probably the first alternative video-upload site creators think of when they're looking for a platform outside of YouTube to upload and showcase their work. Its service is open to anyone, and offers both free, ad-supported video hosting and paid hosting--giving producers and distributors a place to showcase videos without relying on their own infrastructure.
Likewise, video platform Dailymotion is one of the largest upload services in the world. But there are other alternatives available for both enterprises needing big scale and reach, and for smaller producers looking for an affordable start.
We take a look at two online video market players that are giving online video entrants new avenues to promote, distribute and monetize their work.
The game changer: JW Player
In mid-July, GenXers were surprised to find, springing up across their Facebook pages, a Weird Al Yankovic music video they hadn't seen before. The song was "Tacky," a parody of Pharrell Williams' "Happy," and featured Yankovic and a host of other social misfits waltzing through a landscape in their loudest outfits.
While "Tacky" quickly went viral, its rise didn't start on YouTube. The video was released through the Nerdist website, via a custom-branded video player provided by JW Player.
Jeroen Wijering, creator and co-founder, shows off JW Player's mobile capability in a promotional video. (Source: jwplayer.com)
Nerdist had a successful YouTube channel with more than 800,000 unique monthly views from visitors watching podcasts and videos provided by founder Chris Hardwick and staff. But sending visitors from its website over to YouTube to watch videos did not make sense, especially with the company wanting to increase its site traffic in the wake of a major redesign. And Nerdist wanted more control over its videos' functionality, as well as a brand-specific look to the player, better-targeted advertising, and more advertising revenue.
"Nerdist made a strategic decision to do this," said JW Player CTO Eric Hoffert. When Yankovic and manager Jay Levey approached the website about producing the "Tacky" video, Nerdist decided to implement a customized solution from JW Player.
"Tacky" was first available exclusively at Nerdist.com, migrating to its affiliated YouTube channel afterward. Seven additional Yankovic videos premiered over the next few days--part of Yankovic and Levey's #8videos8days social media campaign to promote their new album, Mandatory Fun.
The viral bump for both Nerdist and Weird Al was huge, but so was engagement and media attention. More than 550 news articles were generated about the video, JW Player said, most ahead of the launch of the album--which, as a result of the viral campaign, came out of the starting gate ranked No. 1 on the Billboard 200 chart.
"[Yankovic] never had success like this before. Look at how they created and rolled out the [#8videos8days] campaign. It's a fundamental reason why the album entered at number one," Hoffert said. Mandatory Fun is only the second comedy album to debut in the top spot--and the first to do so in 30 years, he added.
Besides greater control and bigger ad revenues, JW Player's platform also gave Nerdist needed scalability. "Tacky" racked up 8 million video views and 10 million page views in its first 72 hours, a huge traffic spike for the website that was handled through JW Player.
Providing the type of enterprise-level service that Nerdist selected is JW Player's bread and butter. Founded in 2008 (originally called LongTail Video), the New York-based company's founders created an open-source video player that became YouTube's original video player (YouTube uses its own proprietary platform today). Today JW Player sells its video software and services directly to businesses.
"JW Player is virtually run on individual sites. It's everywhere," said Chris Mahl, president. "We have hosting and streaming solutions for small businesses on up. We can do this with virtually anybody."
Companies with just a few hundred views a month or those with millions of views in the same period have access to the same customization and controls. Hoffert calls that flexibility a key differentiator for the company. "The competition tends to focus on high (end) broadcasters, or low end individuals. We can focus across enterprises of all sizes," he said.
And with that control comes the potential for bigger profits than a YouTube presence alone can provide. A March 2014 whitepaper published by JW Player pointed out that while YouTube's CPMs (clicks per thousand) range from $2.50 to $10, "video makers with O&O sites who have moved from YouTube frequently cite CPMs of $20."
While Weird Al Yankovic provided perhaps the biggest publicity in JW Player's history, the company will likely be a market force for some time. It boasts an impressive customer list including IMDB, PBS, Lamborghini and Trip Advisor, among many others. And in mid-September the company raised $20 million in Series C funding led by Greycroft Partners, which previously led a 2012 fundraising round that garnered $5 million for the vendor.
The next big move for JW Player, thanks to the funding, is a foray into big data analytics, CEO Dave Otten told FierceOnlineVideo.
"Video itself is incredibly fragmented. … How do you get quality video content watched by the right people?" Otten said. "We think it's a massive problem we can help our customers and their customers solve."
Leaping out: ILOOK
In July, after five years in development, ILOOK launched its over-the-top platform, which enables YouTube channel owners to stream their content to a mobile app created just for them.
"We made it extremely simple. … Just open an ILOOK account and link a YouTube channel to it," said Peter Redford, founder and CEO of ILOOK. "It automatically copies the videos into ILOOK and then they are auto associated with a mobile TV app. It's a one step, simple process. Create an account, link to a YouTube channel and you're done. A week later your app is out."
Rather than creating a customized, branded video player solution, ILOOK provides an additional marketing outlet for YouTube channels. Whether on their own or as part of a multichannel network, channel owners can create a standalone app that viewers can download to their iOS or Android-based mobile device. The app is also added to a guide that viewers can access to find and install other standalone apps.
It's a way for small businesses and individual content producers to stand apart from MCNs--some of which boast tens of thousands of channels--and do it at no direct cost.
The 3DGuy channel rendered through iLOOK's iOS app. A list of other ILOOK channels is pulled down at right. (Source: ILOOK / Video Creators.TV)
Instead, ILOOK takes a share of its members' advertising revenues in return for the service. YouTube users who already give away 45 percent of ad revenue to Google's video service (plus whatever percentage a MCN may take) may experience some trepidation. However, ILOOK ads can be selectively inserted by the members themselves, giving them greater control over ad placement than they currently have with YouTube. "Commercials can be enabled or disabled by channel app owners in their ILOOK dashboard. When a commercial is played, ILOOK collects a CPM-based fee from the advertiser, keeps 30 percent and forwards 70 percent to the channel app owner," Redford said. Users can also create their own commercials, called "Featured Videos" to be inserted in other members' videos through an auction process.
ILOOK has other revenue-generating services that a content creator can add on, such as pay-per-view video sales, paid subscriptions and other e-commerce. ILOOK doesn't take any of the PPV or subscription revenue, or other e-commerce gains.
For those who need to build an online video brand with little more than bootstraps to go on, ILOOK is an attractive solution.
"On YouTube you're just a directory on someone else's app. Here you have your own app," Redford said.
But bigger businesses are also looking into iLOOK's potential as an extension of their content marketing and branding efforts.
Archival media company AmPopFilms launched with ILOOK as one of the first available apps from the provider. Owner Scott Sobel, who has been purchasing and distributing archive television content since 1984, saw it as an extension of his ongoing online media efforts.
AmPopFilms' iTunes app listing. (Source: iTunes)
"What happened was when I started my Hulu channel (Scott Entertainment, in 2007), I was really hell bent on creating one of the great channels on Hulu for my content," he said. Sobel also launched AmPopFilms on YouTube, providing content from the 1920s through the '80s on that channel. And he leveraged Hoopla Digital, a video library portal provider, to make 70 of his titles available for check-out at participating public libraries.
"I own a lot of the stuff. I produced a lot of the documentaries. I have those special martial arts films. I have those news reels," Sobel said. "That really is important when I pitch Xbox and the other portals that I do business with."
Sobel said it was "perfect timing" when Redford contacted him about becoming one of the first apps available on ILOOK. AmPopFilms is offered as a subscription service at $2.99 per month, or $4.99 per year; it launched with 126 titles, with plans to make several hundred more available. Sobel sees the app as a go-to portal for vintage archival content.
"A lot of my stuff is black and white. Will it fly with this 21st century audience? And it does. …If a kid fixates on a show and is captivated, black and white or color makes no difference."
He's been pleased so far with the reception for AmPopFilms on ILOOK's service, saying the app is a natural extension of his YouTube channel.
"I'm a content guy that built a business entertainment-wise. Peter's media offering reaches another generation with their devices. It's a perfect marriage."