Katie O'Brien
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Katie O'Brien in Senior Content Editor,

YouTube Must Change Advertising Strategy to Stay On Top

Referring to online videos as “YouTube videos” is commonplace. The video hosting service is a household name, with viewers searching the platform for everything for instructional how-to’s to Keyboard Cat.

According to Business Insider, the total revenue for Google (NASDAQ: GOOG) coming from YouTube in 2013 was $3.5 billion. The video giant remained the top service of its kind for years; however, the service may begin to see some changes in its viewership with the launch of potential rival Vessel.

Vessel is a premium video hosting service that will charge subscribers $2.99 per month in order to gain access to videos from their favorite online personalities three days before they are posted on other video platforms.

The serviced launched last month and is headed by former Hulu CEO Jason Kilar, who also brought over many former members of the Hulu staff, as well, Adage reported. Vessel’s format is somewhat visually similar to Hulu’s design, offering a sleek interface and simultaneous browsing, a featuring letting users search for videos while they watch.

However, advertising agreements may ultimately decide whether Vessel sinks or swims in comparison to YouTube.

Vessel signed some of YouTube’s top stars and is expected to make more from advertising than YouTube. Currently, YouTube has a 45-55 agreement with its vloggers, while Vessel is offering 30-70 guaranteeing $2-4 million to the top 100-200 subscribed channels, Adage reported. 

If YouTube wants to compete with Vessel in terms of advertising, they may need to increase the cut of advertising profits video channels make per number of views.