Digital media are stuck with bad economics resulting in relentless deflation. It’s time to wake-up and make 2015 the year of radical—and concerted—solutions.
Reports are circulating that Yahoo is looking to launch a video site that would go up against Google’s behemoth YouTube.
The rumors largely stem from a Re/Code report late last week that cited anonymous sources saying Yahoo is looking to not only launch a YouTube competitor in the next few months but also is trying to pluck some of the video-sharing site’s stars and favorite networks.
A Yahoo spokeswoman declined to comment on the report.
However, Yahoo, and its CEO Marissa Mayer, have been trying to gain some traction in the online world, pulling the company back to the top where it started years ago. Yahoo was once an Internet pioneer but the years, and competitors like Google and Facebook, pushed the company back into the shadows.
Mayer, who was a top executive at Google before coming to Yahoo, wants to turn that slide around. Grabbing some of the audience from YouTube would be a huge step in making that happen.
“If Yahoo wants to be at the center of people’s entertainment, they need a video service,” said Patrick Moorhead, an analyst with Moor Insights & Strategy. “YouTube is a free-for-all video service from cat videos to trailers to real content. Yahoo has a chance to provide less, but better content.”
Earlier this month, Mayer, speaking at the annual 4As conference, said she is focusing the company’s time and money on search, mail, mobile, social media and video.
There have been earlier signs that Yahoo wants to step up its presence in video. Last May, reports circulated that Yahoo was in talks to acquire Hulu, a video site known for streaming TV shows and movies, for as much as $800 million. The purchase never came through as Hulu’s owners canceled plans to sell the company.
To imagine how YouTube might one day become a money-spinner for content producers, consider the power of the irreverent video gamer and online star PewDiePie over his young, free-spending audience.
Each time the wildly popular YouTube impresario has donned Razer headphones in one of the many zany videos that feature him playing games, the product has sold out.
PewDiePie, who is not paid to endorse the brand, “really helped us in terms of getting traction on a much larger audience,” said Min-Liang Tan, chief executive of San Diego-based Razer, which makes gaming hardware. “It’s incredible that YouTube personalities are coming up … and I think it can only grow.”
PewDiePie’s uncanny trendsetting talent highlights the potential that content related to video games holds for Google Inc as it looks for ways to build its YouTube video platform into a powerful new revenue stream.
Advertisers and media companies are indeed already placing big bets on the likes of PewDiePie and others creating gaming-related content in a bid for the prime but underserved audience of 18- to 34-year-olds that devour video games.
Just last week Walt Disney Co agreed to fork over as much as $950 million to buy Maker Studios, one of YouTube’s largest production and distribution networks. PewDiePie, whose real name is Felix Kjellberg, is Maker’s biggest star.
The success of the 24-year-old, with his profanity laced improvisational videos, matches the explosive growth of video-game-based channels on YouTube. His channel has more than 25 million subscribers who can view his content for free, more than Beyonce’s and PresidentBarack Obama’s channels combined.