Amazon’s Competition with YouTube

Just last week, Amazon announced that it would allow people the ability to upload videos onto its site, putting it in direct competition with YouTube. Much like the video powerhouse, Amazon would allow users to earn money from their videos through ad revenue and royalties. But Amazon has decided to enter the user generated video content space too late in the game. Amazon’s approach to uploading content shows that although it may be attempting to take on YouTube in product category, it knows YouTube will always reign in user generated content.

Long Term Loyalty

Amazon said they set up this service for high quality video. According to Bloomberg, “the service is designed for ‘professional video producers,’ but its only requirements are that the videos be high definition and have closed-captioning for the hearing impaired.” The issue with this is the market size. Many YouTube creators started with low-quality content. Most of the top creators today spent 5+ years before reaching the momentous one million subscribers. Now that they have such a following on YouTube, it would be truly surprising to see them use the Amazon service as well. According to Wired, YouTube’s CEO, “Wojcicki’s new efforts address a longstanding sore point for YouTube “as she is now ensuring more of the ad revenue goes directly to the creators instead of Google. Amazon’s approach targets high quality video producers creating valuable content, who have probably already figured out the value of YouTube and found success in the rival platform.

YouTube Culture

One of the reasons why YouTube has been so successful is the fans ability to grow a community around a creator as the creator develops. Starting with bootstrapped content gives a sense of authenticity that has grown to be an integral part of internet culture across platforms. That’s one of the reasons Snapchat has grown so rapidly. Snapchat was able to capture short clips allowing the user to feel as though they had nothing to loose, capturing them in a more authentic way. Starting with high quality content may turn off a large portion of internet consumers who have grown to thrive on the genuine nature of YouTube’s beginnings.

Below is a video from one of the top YouTuber’s Hank Green on the success of YouTube as an online video platform and the culture associated with its creators.

The Infrastructure

Big Frame, Maker Studios, Awesomeness TV. Although these companies may not be recognizable to someone outside of the YouTube fan base, they are full fledged companies that show the strength behind YouTube talent. These talent agencies and multi-channel networks have grown to become the backbone of YouTubers’ sponsorships and additional revenue. VidCon and Playlist Live are two YouTuber conventions that have grown to become major players in the event space. With hundreds of these companies already in existence, it’s clear to see the platform has a very strong following and investment with the creators.

While some YouTubers have experimented with Twitch (a gaming site that was acquired by Amazon), most online video creators continue to use YouTube as their home base. This is what Amazon will most likely end up being: an additional source of revenue for creators, but ultimately not the main platform for their content. It will be interesting to see what new details come out regarding compensation for creators and how it will compare to YouTube’s own ad revenue system.

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