What's with YouTube and Content Creators?

As news about YouTube banning content creators from working directly with brands does the rounds, we find out what exactly this means. Is YouTube being a bully?

It has been a while since The Viral Fever (TVF), All India Bakchod (AIB), Being Indian and other such content channels have entertained us. People have, in large numbers, begun subscribing to these networks on YouTube. Subsequently, brands saw an opportunity - they started tying up with these content creators by sponsoring the content, giving birth to a whole new avenue for marketing.

Last week, the sentiment of this industry was dampened by reports about YouTube having amended its policy, in a move to discourage independent content creators from working directly with brands for sponsored videos.

The policy refers to the blocking of "graphical title cards" from sponsors looking to promote their brands and products on YouTube channels. It also forbids video overlays of sponsor logos and product branding, unless the sponsor pays Google to advertise on that channel.

Consider this example: The Viral Fever, a multi-channel network (MCN) on YouTube, recently released a series titled 'Permanent Roommates', which was sponsored by Commonfloor.com, a property portal. At the beginning of each episode, a slate with the brand name written on it appeared - a clear message to the viewer that the show was sponsored by this brand. As per its latest communication, YouTube now forbids content creators from including ads in their content through 'burnt-in' logos, title cards and ads that appear within the content.

About this, YouTube's spokesperson in India says, "Our policy on including ads in content has not changed. For a while now, we've had policies in place that prohibit creators from including ads in their content. Recently, we added a question to our help center to more accurately reflect our existing policy."

In keeping with YouTube's policy, brands will now be required to spend money on Google ad units in order to sponsor video content on the platform. This means less revenue for the content creators, more for YouTube.

YouTube is not stopping MCNs and content creators from brand/content integration. The ban is on burning logos and including ads within the content. This means, an advertiser can show a product and weave a brand story around it for its viewers, but cannot include slates and logos burned into the content.

Arunabh Kumar, founder and CEO, TVF Media Labs, says, "I think some of the things were not allowed initially, but, within the content, having a product placement and informing YouTube about it, was never a norm. Also, they have asked us not to put a brand slate at the beginning of the video. Now, when there is a property which is ours and we are getting a brand associate for it, that can be a problem."

On the other hand, Rajeshree Naik, co-founder and director, Ping Digital Broadcast, is unperturbed.

She says, "As far as we know, there have been no changes in any policy. Burning pre-rolls within the content was always forbidden. As an MCN, we continue to focus on working with brands for various innovations within content, such as native advertising and branded content. In fact, we are seeing a upswing in brands going beyond approaches like pre-rolls."

Naik adds, "If anything, this is an opportunity for us as we spare independent content creators the hassle and help them work with brands within the guidelines that have been set - guidelines they may not be familiar with."

Says Sameer Pitalwalla, CEO, Culture Machine, "The policy doesn't stop any content owner from dealing with the brand directly. One has to read the policy in detail." He doesn't find the new policy any more restrictive than the previous ones.

Revenue Game

For any MCN or content creator, there are two streams of revenue - ads and brand integrations.

When Google ads run on the content produced by an MCN or a content creator, YouTube takes 55 per cent of the revenue. Which means, for every 1,000 views, the channel partner gets around Rs 100-300. The second way of monetisng a YouTube video is through brand integrations, like the way TVF tied up with property portal CommonFloor.com for the aforementioned series, 'Permanent Roommates'.

Now, in keeping with the new rule - or rather, the re-inforced old rule - the brand in question will have to buy media from YouTube, as per its standard rates, in order to sponsor a video.

Kumar of TVF says, "From a revenue point of view, both Google and YouTube are monetising their platforms so they can get the brands to invest more. But, making the entire creator ecosystem jump through a couple of hoops makes it a tricky process."

How so? He explains, "If a brand associates with us, we can make more shows. On the back of this content, YouTube is selling its ads and pre-rolls. I dont think it's a wise decision because, this way, you are discouraging professional content creators for whom YouTube has been an efficient broadcast system. It is one of the best DTH boxes I have."

Kumar, however, understands that YouTube is only trying to best monetise its platform through policies such as these. "These are slightly fuzzy issues," he offers, adding, "It is too early to panic about it."

Rajiv Dingra, CEO and founder, WATConsult, however, feels YouTube has hit content creators hard with this. "The impact will prevent content publishers from earning additional revenue, while advertisers will have to pay both, publishers and YouTube. The kinds of rate brands were getting with publishers will now change. Brands will now get a standard rate with YouTube," he predicts.

The development, according to Dingra, is hard on content publishers as "they have built a platform with a huge subcscriber base and now they cannot even monetise it at their own will."

"This policy was always there, but YouTube is enforcing it now because the scale of publishers is growing heavily in India," he adds.

Unni Radhakrishnan, head, digital, Maxus, believes that YouTube reinforcing this policy will "impact content creators and production houses who are working with brands without having any media spend on Google."

He adds, "At this point, it is not very clear how it will work. I think they are becoming strong media platforms with huge consumption, and people who are investing in them will need returns. If there is a great story to be told by a brand, via a content creator, it really needs to have YouTube as its media partner."