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Thursday, December 18, 2014

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  • Case Study: "The Young Turks" Expands Beyond YouTube, to Roku and Beyond

    If you're looking for a case study on how a successful independent content provider with its roots in YouTube is looking to diversify its distribution through other devices/outlets, "The Young Turks" (TYT) is a great example. Yesterday the company announced the availability of its Roku channel and its intention to launch standalone Android and iOS apps soon. TYT's COO Steve Oh told me these direct-to-consumer initiatives are part of a broader plan to augment - but by no means abandon - its traditional distribution through YouTube.

    With 50 million views per month, 1 billion+ views to date, and over 1.1 million subscribers, TYT believes it is the biggest online news show in the world. TYT is a top 50 YouTube partner, and what Steve calls a "boutique multichannel network" (MCN) because it focuses on a relatively narrow slice of partners in online news. While there has been some public grumbling about YouTube from its content partners lately, Steve had nothing but praise for the 800-pound gorilla of the online video world, highlighting that all of TYT's new efforts are an "augment" not a "replacement" for YouTube.

    Steve was quick to note that YouTube has been supportive of its efforts to diversify, going so far as to make introductions to other outlets/devices. Steve makes a very good point that content providers' diversification efforts are actually good for YouTube because, to the extent that they succeed, they reinforce the idea that YouTube can serve as a great incubator. In other words a "Great content starts on YouTube" positioning could entice even more aspiring content providers to look to YouTube as their starting point. With its massive audience, YouTube is in little danger of ceding this position to a competitor.

    Adding to YouTube's luster in Steve's view is Chromecast, which he is "super excited" about. With YouTube "casting" built into Chromecast out of the box, Steve sees TYT content becoming more appealing in the living room, and being on a level playing field with established cable news channels. I agree with this assessment, and, as I said last week, believe Chromecast is a game-changer for any content provider that does NOT have a foothold in the pay-TV ecosystem but wants broader living room access.

    Despite all of YouTube's advantages, Steve points out that TYT doesn't want to become overly reliant on just one distribution partner, and that's why diversification is critical. Steve also notes that YouTube's revenue split - 55% to the content provider and 45% to YouTube, is the most onerous in the industry, and so other outlets offer potentially richer payouts.

    One of the challenges of moving beyond YouTube is that TYT needed a more robust content management and monetization solution, and so it has turned to OneScreen. Atul Patel, OneScreen's founder and CEO, told me that OneScreen has replicated TYT's entire library for use on Roku, which will also support the iOS and Android apps that OneScreen is building. In Roku, ad serving is also available, though ads have not yet been placed.

    For now, YouTube is TYT's main outlet, driving 100-120 million minutes/month of viewership. But a month into a quiet launch of the Roku channel, it is already up to 300K minutes of viewing/month, and Steve expects that to grow with further promotion and awareness. It's still early days for TYT's migration beyond YouTube, but, like so many other MCNs these days, TYT is committed to exploring new distribution paths. This is already a broad trend and one that I see becoming even more significant going forward.