Twitter takes on YouTube by courting video makers

Matthew Bailey/Ovum

OvumFollowing a series of disappointing results announcements, Twitter has continued its pursuit of online video ad budgets by rolling out new monetization options for individual video creators in the US. However, this move places Twitter in more direct competition with YouTube, particularly given YouTube’s reported focus on becoming increasingly like a social network.With Facebook doubling down on video in pursuit of monetization, and other platforms such as Snapchat also growing their presence, carving out any kind of significant market share will be tough for Twitter.

Twitter will become just one of many distribution options for multi-platform creators

Twitter is becoming increasingly reliant on video, which is now the number one ad format in terms of revenue on the platform. But Twitter’s focus has been on the traditionally “premium” end of the video content ecosystem – deals with the NFL and other sports bodies are testament to this.

Furthermore, the company’s Amplify video monetization platform – which sees pre-roll ads run alongside publishers’ videos and operates on a revenue-share basis – had previously only been open to “select” publishers and creators.

However, new types of “democratized,” influencer-created video content continue to redefine what constitutes “premium” video, especially for younger viewers. It is simply not enough to merely offer traditionally premium content anymore – particularly in a mobile, social context. Crucially, Twitter has lagged behind the likes of YouTube in enabling advertisers to align their brands with influencer-created video and enabling creators to monetize it. Twitter’s primary status as a comment-driven – rather than content-driven – platform may also limit its distribution appeal for creators, who will be wary of courting negative attention.

In response, Twitter has made attracting “creators and influencers” one of its five main priorities for the year. An extension of the maximum Twitter video length from 30 to 140 seconds, and the launch of a creator companion app, Twitter Engage, mark two attempts to achieve this objective. Last week, Twitter expanded the availability of Amplify to all “approved” creators in the US, who can now choose to monetize their videos through pre-roll ads on Twitter. Sources suggest that the revenue share is weighted 70:30 in favor of creators – much more favorable than the 55:45 split offered by YouTube. Facebook, meanwhile, only offers an ad-revenue share to select professional partners through its Suggested Videos feature, which reportedly offers much lower returns for video publishers than other platforms, including Twitter.

The increased scale of YouTube and Facebook’s video platforms will likely outweigh the benefits of a more favorable revenue share for many creators. Creators and influencers also continue to seek a multi-platform presence, and many already post their content across YouTube, Facebook, Instagram, and Snapchat. Indeed, Facebook and YouTube are already battling to keep viewers and creators engaged with their platforms, continuing their march towards becoming all-encompassing hybrids of social networking and online video.

Rather than directly enter this battle for dominance, Twitter seems content to serve as another option for creator-generated video distribution, rather than the main option. Individual creators looking to monetize their videos on Twitter are not beholden to the platform, and are able to post and monetize the same content on other video platforms.

Ovum is currently in the process of forecasting the online video advertising market, which continues to grow strongly and account for an increasing share of total digital ad spending. Settling for third – or even fourth – place in the battle for social video ad budgets in the US could still provide a decent revenue stream, but not the market leadership that Twitter is striving for.

Matthew Bailey is an analyst for digital media at Ovum. For more information, visit www.ovum.com/

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