Why Are YouTube Users Abandoning Ship?

During my keynote at this year’s Vidcon conference in late June, I talked about the flight of users I’m seeing from YouTube, and I commented on how I thought the site’s direction was misguided.

It certainly got people talking. One of the top execs at YouTube chastised me for even saying it, while some blogs construed it to mean that I was calling for a wholesale abandonment of the platform. Of course, it didn’t help that I used a cartoon of rats jumping from a burning ship to punctuate my point, but in fact, I was preaching a bit of the reverse.

Here’s what’s going on: Over the past year or so, many YouTube native creators have been questioning whether or not the site offers the best long-term place for their talents. There’s greener grass on other platforms, they surmise, and they’re starting to build and move their communities elsewhere.

Alloy Digital’s popular Smosh channel’s success in building its own site, Smosh.com, is often held up as a model. Through deft techniques, Smosh has turned its Web site into a real moneymaker, and those on the outside are jealous.

But Smosh is a bit of an anomaly — at least so far. Last year, The Collective inked a strategic alliance with Blip.TV, and tried to move Annoying Orange, Fred and some of its other creators over to that platform, with limited success. In the run-up to Vidcon, I talked to a wide variety of creators who were looking to do the same. The Collective, not to be dissuaded after its lukewarm first effort, recently purchased competing video site Metacafe, apparently to give it another go.

Why this rush for the exits? In part it’s because YouTube keeps a big chunk of the revenue it earns via these creators’ channels. But many have been spooked by YouTube’s new channel initiative, perceiving it as favoring more polished, old-media stars — at the expense of its burgeoning channels and communities.

It doesn’t help when the percentage of streams that can be monetized has been dropping for many as well — as more and more views happen on mobile versions of YouTube that today offer scant support for most ad units.

But I advised the Vidcon audience to avoid a headlong rush toward emulating Smosh. First, it’s extremely difficult to move a community from one site to another. And when you start, you risk losing them altogether as they discover other shiny new places to hang out. The effort required can be immense: building a traditional old-media Web site with the same capabilities as YouTube is a herculean task. Finally — and this was the real kicker — look to new platforms, not past ones, to build those new homes.

Look at what Phil DeFranco has done (disclosure: Phil has been part of Revision3 since January). Phil’s been putting his efforts into both expanding on YouTube and building out his mobile apps. I can’t give you all the details, but it has been a resounding success.

And that’s where I suggest creators focus their efforts. Look to tablets, smartphones and smart TVs. Ride the growth of new platforms, rather than fighting over the scraps of the old. But — and this is a very big but — figuring out which platforms will win, and then building apps for those platforms, can be all-consuming. I’m convinced today that it’s going to be Google/YouTube, Apple/iOS, Microsoft Xbox/Metro and Amazon. I call them “The Four Horsemen of the Streampocalypse.” But the landscape could shift in a minute. Samsung’s coming on strong. Facebook might become a real video platform. Twitter wants to fund its own video properties (say what?!). And something we’ve never even heard of could swoop in and dominate.

Don’t count YouTube out, either. It’s working non-stop to monetize these emerging platforms, and to return that money to creators. It’s building a wide range of super-cool new features that will make the platform an even better place to build your communities, your business and your brand.

Even Matt Diamond, CEO of Smosh parent Alloy Digital, agrees with me. “Content should be everywhere,” he told me recently, “but YouTube as the clear industry leader is by far the best partner and place for content to originate and thrive.” Will YouTube continue to own 50 percent or more of video views on the Web? Maybe not — but it’ll still be the biggest (and for many, the only) game in town for a long time to come.

But hey — all you guys looking to jump ship: Go right ahead! You’ll be spending a lot of time treading water as you grasp first for one and then another shiny bauble to keep you afloat. The more people get distracted and head for the exits, the more audience and attention get left for those who stick around and invest for growth.

Jim Louderback is the CEO of Revision3. He was previously Senior Vice President and Editor in Chief of PC Magazine.