Analysis: Amazon And YouTube Get Ready To Rumble Over Online Video


Amazon is moving into the space long held by YouTube, announcing on Tuesday the launch of a new platform that allows anyone to post original content.

Called “Amazon Direct Video,” the site offers creators a way to make money in a variety of ways, including royalties on videos streamed by paying Amazon Prime members, revenue shares for videos rented or purchased, ad impressions for free-to-watch videos, and any combination of these models.

The initiative is the latest by the retailing giant as it seeks to become a major multimedia player. The company has gotten accolades for its original TV shows, such as Transparent, and has been signing a bevy of exclusive deals to distribute original content from HBO. Amazon Direct Video will launch with content from Conde Nast Entertainment, The Guardian, Baby Einstein, Pro Guitar Lessons and many others.

The new platform places Amazon in direct competition with Google’s YouTube, the firm leader in the video upload space that counts 1 billion users. YouTube has its own revenue sharing model for its top creators. Starting in 2007, it launched its Partners Program, which gave popular content creators a cut of the ad revenue earned from views to their pages.

But there has been controversy in the cut that YouTube takes, which is 45 percent of the revenue, and the site does not offer to cover any video creation costs, leading some YouTube creators to speak out about comparatively unfair profits

Amazon has not yet detailed what percentage of revenue creators will get with the Direct Video service. But it is offering a pay-to-subscribe option direct to each individual channel, similar to Twitch, which allows users to “follow” specific content creators for a fee. The owner of the channel would make a percentage of the profit from those subscriptions. Amazon will also pay out $1 million as a bonus among the creators of the top 100 videos viewed by Prime members every month. (Jeffrey P. Bezos, chief executive of Amazon, owns The Washington Post.)

Meanwhile, Vimeo, another video platform for original content, recently acquired VHX, which runs on a subscription model geared towards independent content creators. Vimeo has long been an ad-free platform that makes its money through premium subscriptions that offer perks to creators such as higher bandwidth and audience data with paying accounts.

In 2013, it launched its Vimeo On Demand service, which allows users to directly sell content to the public for a much higher cut (Vimeo only takes 10 percent of the proceeds) than competitors like YouTube.

(c) The Washington Post · Karen Turner