What if I said that the better you understand the mechanism behind YouTube’s business model, the higher your streaming rate will be on YouTube? Yes, that means reading this article could improve your YouTube rates — maybe even double or triple them. Get ready for a major change in the way your content is valued.
If your business currently revolves around retail models, whether iTunes or brick-and-mortar stores or subscription services like Spotify or Netflix, you may not be aware of the primary driver of YouTube’s unique business model, which is projected by Citi to generate $3.6 billion in gross revenue this year. What’s incredible about their model is that even as YouTube integrates more and more pre-roll ads, which should reduce viewership, traffic grows 20% a quarter according to comScore.
The fundamental difference between the industry built around YouTube (arguably “the future”) and the industry music and film rights owners are accustomed to (a little too early to call it “the past”) is the difference between an auction and a retail store. Music and film rights owners have built their businesses around a retail model, where rates are set and their ability to drive revenue is tied to their ability to sell units or get streams. YouTube’s model works more like a TV network, where the value of the product is only as big as advertisers are willing to pay to advertise against it, so the networks are always looking for the highest bidder, like an auction. For a TV show that auction typically happens by the season, but on YouTube that auction runs by the split second.
So YouTube is an auction, which makes your new customers (the buyers) the brands and advertisers. While fans control your traffic, which is equally important, the brands control the value of your content (the price) in this new ecosystem.
A lot has changed since The Orchard opened its doors 15 years ago. Whether it’s the way music is delivered and played, or how it’s marketed and shared, there’s no tip-toeing around it: without technology, we wouldn’t have created the opportunities to develop the way we have.
Here are 15 technological advances that have marked us, in good ways and bad (though we like to think we took the bad and turned it into something positive!):
And in more detail…
Videos on YouTube claimed by The Orchard have surpassed 4 billion streams while under The Orchard’s control, thanks to the success of the advanced content feed it engineered to connect to YouTube’s content identification system, as well as its position as one the largest digital distributors. The automated feed enables a large volume of content to be instantly “fingerprinted”, a process which empowers YouTube’s system to find videos on YouTube containing content managed by The Orchard and apply advertising to monetize the streams.
The Orchard’s user generated content monetization system applies to all types of media, including audio, music videos, television shows and movies. The YouTube streaming data is even imported into The Orchard’s client dashboard, where clients can see their daily streams and how they correlate to their retail sales or marketing efforts. The Orchard’s longstanding partnership with Google has developed a new revenue line for clients over the past few years, but it has also added the ability to start driving YouTube’s massive traffic to digital retailers like iTunes for purchasing music and to YouTube’s new premium movie section for renting movies. YouTube has become a content discovery service and a marketing tool as much as a significant revenue generator, positioning them as one of the only such hybrid models in the industry.
