In March, Recode revealed Yahoo’s plan to build a YouTube competitor by striking deals with some of the most popular video creators on the Internet. A new article in AdAge has now reported that Yahoo’s new platform is indeed on its way, though the company has encountered several hurdles in its attempt to poach some of YouTube’s top stars.
To build its new platform, Yahoo is targeting creators who are miffed by YouTube’s aggressive ad rates. While YouTube takes 45% of all advertising revenue, Yahoo is reportedly promising a split that will be much more generous to the creative community. It is also offering CPMs that will exceed those of YouTube by at least 50%, according to the report. Another strong selling point is the ability to promote videos on Yahoo’s other properties, such as Tumblr.
This pitch has some online video creators interested, but a few central issues are slowing down the negotiations. Most of YouTube’s top creators already tout CPMs that far exceed the site’s average, so it’s unclear how much more money they can actually make by teaming with Yahoo.
Also, while Yahoo will not require exclusivity from its creators, it wants ownership of videos posted to Tumblr, a stipulation that does not sit well with the independently-minded online video community. “I’ve never seen anything like that in my life, and I’m assuming they’re going to strike that [from the final contracts],” one of Yahoo’s target video producers told AdAge. “Anyone who’s done a content deal knows that would never fly.”
Perhaps most damning, though, is the accusation that Yahoo doesn’t quite have its online video plans under control, a fear that has only been exacerbated by the new platform’s delay (According to the report, Yahoo originally planned to debut it at its Newfronts presentation on April 28th.) Some of Yahoo’s targets are unsure about the site’s exact plans, particularly when it comes to promotion.
All of these concerns have online video creators acting very cautiously. Some have decided to wait for Yahoo’s new platform to launch, at which point they will decide whether it is worthwhile. Of course, without top talent, how can Yahoo prove itself as a major YouTube competitor? CEO Marissa Mayer and her team are in a tough spot, but they’re still aiming for a summer release, at which point we will learn more about the potential of Yahoo’s new platform.
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