YouTube's VidCon Keynote - The 4 Big Stories

YouTube CEO Susan Wojcicki took center stage at VidCon day 1, giving a 20 minute keynote and then answering some astute, challenging questions from BroadbandTV CEO Shahrzad Rafati for 20 minutes more.  These were no softballs -- question is whether Wojcicki saw these questions in advance.  Didn't really seem like it, because several of the most challenging questions (see below) were somewhat awkwardly deflected (guess which ones? Yes, those questioning YouTube's economics).



Here are my HEADLINES/KEY STORIES from the YouTube Keynote and Q&A:

(1) THE ECONOMICS STORY -- We all know many in the industry (certainly YouTube's increasing number of competitors) slam YouTube for its 55/45 economics they say are unworkable for creators (Jason Calacanis anyone?) -- and work for YouTube only.  Raft directly asked Wojcicki about YouTube's own direct revenues and creator monetization.  This was Wojcicki's most unsatisfying answer, as she rather obviously (and not the most artfully) deflected it.  She didn't respond to the "YouTube revenue" question at all, instead pointing out that creators soon will have more opportunities to monetize via subscriptions and YouTube-funded originals.  "Some can even write books."  And, in her presentation, she also emphasized that 50% more creators made "six figures" this year than last on YouTube.  Yes, that's true of course.  YouTube can be (and has been) a great launching pad (case in point -- YouTube now counts nearly 25 creators with over 10 million subscribers, each of whom will now have a diamond "button").  The question is, however, (i) how many creators and what percentage of overall creators earn six figures (unanswered) and (ii) how many (and what percentage of) creators can really monetize beyond their 55/45 split.

(2) THE FACEBOOK STORY -- One year ago, YouTube was essentially the only game in town for creators.  Not anymore.  Facebook, Snapchat, Vessel ....  Raft asked Wojcicki about Facebook (and cited its increasingly impressive number of views metric) -- and how she felt about seeing YouTube creators now "off" YouTube and on other platforms.  Wojcicki didn't directly mention Facebook, but she implicitly did -- stating that YouTube believes that viewer engagement (as measured via actual "watch time") is more important than the number of views (meaning that YouTube believes Facebook's reported metrics are less meaningful -- which may be true, by the way).  She also highlighted the fact that YouTubers spent 60% more time watching videos this year than last (which is a truly impressive number).

(3) THE VR/IMMERSIVE STORY -- This may be THE product story for YouTube at VidCon this year.  Watch out all you VR startups out there who want to be "the YouTube for VR content."  YouTube wants to be the YouTube for VR -- and is moving fast.  A key initiative is to showcase more and more 360 video, including "immersive" 3D 360 video.  To underscore this point, YouTube gave away free Google Cardboard to all keynote attendees.

(4) THE STEALTH VERTICAL FOCUS (& MCN THREAT) STORY -- While Wojcicki emphasized YouTube's top 3 product priorities as being "mobile, mobile, mobile," the real story here is YouTube's direct attack on vertical-focused video digital-first companies on and off YouTube (i.e., MCNs).  One key selling point to creators and MCN viewers has been focus -- "if you are a gamer, come to Machinima, we are the home to content that matters to you and you only" (you don't need to sift it out from all the noise).  YouTube's new answer to this critique (and the growing success of vertically-focused, yet significantly smaller, competitors) is to create and launch separate vertically-focused channels, each with their own separate mobile apps.  First, YouTube Kids.  Next, YouTube Gaming.  And, third, YouTube Music Key (which may be launched under a new name).  And, you can bet this is just the beginning.  So, watch out MCNs, the hand that feeds may be biting back.  Your MPN strategy is right on.