VidCon 2015: YouTube Collides with TV

-Online Stars Shine at VidCon 2015
-While TV Nets Struggle to Tread Water

YouTube is becoming more mainstream by the quarter, and never has that been clearer than over the past few weeks, which saw the biggest year yet for YouTube’s annual VidCon, juxtaposed against a less-than-stellar outlook for linear TV ratings and pay TV quarterly earnings.


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Millennials and Generation Z viewers prefer online media over linear TV – the studies underscoring this point have been numerous so far this year. Google’s chief business officer Omid Kordestani said last week that YouTube reaches more viewers aged 18-49 than any pay TV network in the world, and it’s hard to argue with that.

YouTube watch time is up 60% over last year. YouTube stars graced the cover of Variety magazine recently in a series that covered the rise of the digital stars and their undeniable significance in pop culture.

“You’re the stars of today,” said YouTube chief Susan Wojcicki, speaking to content creators at VidCon, which is held for YouTube creators and fans. This year it drew 20,000 attendees.

The backdrop to YouTube’s shining diamond play buttons – which were given out as gifts to those content creators that have over 10 million subscribers – is a TV industry that is facing serious trouble.

This week, Bernstein analyst Todd Juenger released a report entitled “Is Viacom the Next Eastman Kodak?”, in which he predicts that the once-dominant media firms and TV networks are being replaced by digital alternatives. This is particularly apropos for those networks that target younger demographics, such as Viacom. Younger viewers are “the segment of the population that’s most rapidly and definitively abandoning linear TV,” Juenger states.

The report comes just a week after Susanne Daniels, MTV’s former president of programming, has signed on to YouTube as head of original content development. The move is a clear indication of the times: Daniels isn’t the first TV exec to abandon the linear ship, and she won’t be the last.

Meanwhile, YouTube is pursuing a programming strategy to finish off linear TV.


Internet Killed Television

At VidCon, attendees were sporting shirts that read “Internet Killed Television.” So it’s with a touch of irony that Viacom’s Nickelodeon held a casting call at the conference, looking no doubt to find the next big teenage star.

It may be a first for both VidCon and Viacom, but it wasn’t be an isolated phenomenon; Universal Studio was also scouting VidCon for talent for its upcoming “Jem and the Holograms” movie; and NBC’s “The Tonight Show with Jimmy Fallon” had a booth set up, recording clips of fans lip-synching for a segment that later appeared on linear TV. It’s worth noting that over 70% of “The Tonight Show” audience is watching video online now, not on TV, according to NBC.

And it’s worth noting that Katie Couric opened the conference with an on-stage interview with BuzzFeed’s Ze Frank and YouTubers Grace Helbig and Joey Graceffa. Couric, we’ll remind readers, a veteran news anchor for three of the big broadcast networks in the States, has since left linear TV to head up Yahoo’s news division as global anchor.

As John Green, VidCon cofounder, YouTuber and author, noted in his keynote address at the conference, “Great video is being made off television.”


TV Isn’t the ‘Dream’ Anymore

TV networks have recognized the shift in power, and now look to YouTube to find content and stars. YouTube, like Instagram and Vine, have become self-sustaining pools of talent for agencies and media firms to fish in. Nickelodeon is already broadcasting a few TV shows that either star YouTubers or are related to the platform. Take the show “React to That,” a linear TV program based on YouTube’s The Fine Bros’ popular Web series “Teens React.” Nickelodeon also airs a “variety show” with YouTube multi-channel network (MCN) AwesomenessTV; and YouTube star GloZell Green will appear as a guest on a new sitcom that will appear on the network this fall.

This type of cross-pollination has occurred over the last three years. The difference, which has become so apparent this year as opposed to last year, is that TV isn’t just competing with YouTube, it’s being left behind.

Green hinted at this paradigm shift in his keynote address. “I couldn’t have imagined that YouTubers would be turning down traditional TV opportunities because, as a friend of mine recently said, ‘Why would I take a pay cut for the privilege of not owning my intellectual property?’” he said.

YouTube has decided two years ago it wanted to fashion itself into something of a TV alternative. It began funding creators to help them develop channels of programming; it promotes its top stars with big splashy billboards and metro adverts; it’s created a number of programming positions within its own organization, including heads of scripted content, family entertainment, and comedy. And while larger media firms and TV networks are circling the platform looking for talent to snatch up, YouTube is signaling to its top creators that anything they want to do on TV, they can do on YouTube.

“When we have creators, and those creators have large fan bases, and other media companies are coming to them and saying they want to do X, Y and Z with them, I’m looking at that saying, ‘Well, why can’t we do X, Y and Z with them?’” Wojcicki said at VidCon.

And on YouTube, creators aren’t limited by time slots or platforms. They have access to a global online audience that can be as big as they can make it.


VidCon Isn’t Just about YouTube

The conference, which has bloomed over its five year history, isn’t just about YouTube either. Online celebrities from Vine, Snapchat, Twitter and Instagram are present at VidCon, and are edging in on YouTube’s popularity. Take KingBach, a Vine celebrity that has generated over 4.5 billion views of his content on Vine. He’s more popular than teen star Justin Bieber on the platform.

Meanwhile, platforms such as Vessel and Facebook – also present at VidCon – are edging in on YouTube’s online video business. Vessel is seen by YouTube creators as an opportunity to generate more revenue; but Facebook is seen by YouTube as a competitor for advertising dollars, and consequently, Facebook ultimately poses the larger threat to YouTube’s business, even if Wojcicki won’t admit it.

Together, all the online video platforms are taking advertising dollars away from linear TV. Overall, digital ad spend received $1.5 billion from traditional TV advertising outlets during the 2014-2015 TV season, according to Standard Media Index, and most of that money came from OTA broadcast TV networks. Online video makes up only a small portion of that, but it’s growing at an impressive rate.

And YouTube creators have a message for advertisers…

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