6 Ways Social Video Changed Forever in 2017

It’s that time of year, folks: the avalanche of year-in-review articles will be appearing on your favorite industry websites. Naturally, we decided to do our own roundup of the year in social video and platforms, content creation, and influencer marketing.

1. Adpocalypse

The story of the year in online video was the cleverly-named Adpocalypse (ironically, a term coined by disgraced creator PewDiePie), the period of controversy that saw major brands withdraw as YouTube advertisers after examples surfaced of their ads running against questionable or even hate-filled content. Around the same time, as we all remember, the aforementioned one-time top industry star PewDiePie was investigated by the Wall Street Journal for anti-Semitism in his stunts and was later dropped by Disney Digital Network.

The result? YouTube’s immediate response was to demonetize a wide swath of content while they honed in on the videos that were actually problematic. We watched as our colleagues and customers faced double-digit nosedives in monthly revenue during this period, and those that didn’t rely on four or five revenue streams had cause for panic. Some individual creators complained bitterly, asking YouTube for more information on the rationale behind demonetization.

In time monetization was restored to a significant amount of video content, and life (or business) went somewhat back to normal. However, reverberating concerns around brand safety continue as YouTube has recently cracked down on inappropriate children’s content (to the point of removing channels) and announced that it will add more human moderation of content going forward.

The bottom line: There is no going back after Adpocalypse. It shook those who rely on YouTube – from creators to talent networks – to their core. Industry players realized that the response of a large platform when dealing with a much-publicized crisis is to turn on a fire hose of crackdown initiatives. Ironically, brands (and agencies on their behalf) have long had the option of selecting the exact content their ads would run against, and we can’t help but feel that some of the crisis came from misunderstanding of or lack of familiarity with existing platform features. The whole experience was a signal that brand safety has become the main priority for platforms going forward, as the relationship with advertisers is paramount. Creators, networks, and agencies must all operate on multiple platforms and be prepared to react nimbly to future upheavals.

2. The Rise of Instagram Stories & the Decline of Snap

Image: TechCrunch

 

This was the year that one platform yanked a market out from under another by stealing (this part started in 2016), iterating on, and crushing user growth on a major product.

Yes, we’re talking about Instagram vs. Snapchat. 2017 was by all accounts a rough year for Snap (the parent “camera company”) behind the Snapchat app. Although it had started out looking promising with and an IPO early in the year, by late 2017 Instagram’s Stories had exponentially smoked Snap’s original version in user growth, reaching 500 million daily active users by September, and had been copied by Facebook and YouTube too (YouTube’s version is called Reels). The company’s Spectacles product didn’t live up to expectations. To boot, Snap’s stock declined (although it went up in early December over forecasts) and CEO Evan Spiegel effectively apologized for ignoring rank-and-file creators, admitting that his intention to re-boot the Snapchat platform in their favor would take time and cause a temporary delay in platform evolution.

The bottom line: There’s a theme here. Being a major platform whose products and features can be easily cribbed (and even improved upon) by competitors is risky. Snapchat’s ownership is said to have rebuffed a purchase offer of $30 billion from Google in 2016. Perhaps they should have taken it – time will tell.

3. Facebook Moves Toward YouTube-ness

Facebook made its much-anticipated move into video advertising and monetization, with its ability to be a serious YouTube competitor remaining unclear as of this writing. The platform launched mid-roll ads against some video content in the News Feed, and will soon be re-adding pre-roll ads, in this case to video outside the News Feed. Probably the biggest Facebook video news of the year was the launch of the Watch tab and Facebook Originals, with content partners including Tastemade, Univision, and MLB. Finally, a suite of creator tools is now available.

The bottom line: There remains a lot of debate around whether the Watch tab will become a significant destination for viewers. It’s unclear whether the quality or type of video content exhibited so far will have resonance or, related: longevity. Viewers may have a lower tolerance for ad placement than they do on YouTube, which is why pre-roll ads won’t be in the News Feed. And in spite of Facebook’s incredible user base, promotional feed, and profoundly useful (for audience-building) sharing features, there’s still no reliable way for most individual creators beyond a select few to monetize on Facebook.

4. Politically-motivated Platform Manipulation

The big reveal of Russia-based manipulation of social media platforms in the run-up to, during, and after the 2016 U.S. presidential election was the great shame of the digital media industry this year. Though the great vision of online platforms combines the democratization of content, the ability to form communities and connect people across borders (which Mark Zuckerberg frequently references), and the ability to express one’s views publicly or spread an important movement (think #MeToo) with relative ease, the downside is that the platform owners are very clearly not one step ahead of the bad guys.

Advertising mechanisms were exploited. People’s vulnerabilities, biases, and willingness to believe what’s put in front of them were abused to the nth degree. Bots revealed all their ugly influence, and the extent of their impact may not yet (or ever) be truly understood.

The bottom line: The big dream of the social platforms and what they can do for society took a big hit this year. The platforms (Facebook and Twitter in particular) still have a lot of ‘splainin to do around how they track advertisers and advertising funds, as well as how they account for activity from truly nefarious actors. Moreover, the more organic “echo chamber” effect of like-minded people constantly reinforcing each other’s views, and the ever-ugly troll culture, have become real societal factors and their impact must be better understood and mitigated (if we ever figure out how).

5. Platform Updates – Twitter 280 (also, RIP Vine)

Well, it finally happened. In November, Twitter rescinded the 140-character limit that had been in place for the entire life of the platform. The overall reaction appeared to be complaints that the new limit would destroy the joys of micro-blogging and make the platform more like Facebook. Numerous joke tweets ensued.

More seriously, the Twitter brand took hits from its user base and the media not only for cyber-bullying by trolls but also for what appeared to be inconsistent enforcement of Terms of Service violations. Some claimed that regular users received more scrutiny from Twitter than public figures or celebrities, with a regular smattering of @jack complaint tweets to CEO Jack Dorsey’s handle.

Speaking of Twitter, 2017 was the year that the platform actually shuttered micro-video app Vine to focus on Twitter Video. One bright spot to end the year for Vine enthusiasts: one of the app’s founders has recently teased that a new version of Vine might make a comeback.

The bottom line: The negative reaction to the increased character limit now seems like a tempest in a teapot, but the move toward a more algorithmic presentation may be what really impacts Twitter’s distinctiveness. Users who visit the platform for real-time updates, breaking news, and commentary may instead wade through 18-hour-old posts and tweets liked by their contacts. Twitter is taking a risk programming the feed in the direction of, well, every other social media platform.

6. Ecosystem Ups and Downs

Finally, 2017 was a significant year for ecosystem changes and painful signs of maturity in the digital space. Maker Studios underwent a re-branding (to Disney Digital Network) and restructuring process that saw the network keep only a small percentage of its talent. Fullscreen announced that its SVOD platform, at one point a flagship of the Fullscreen family, would cease to exist after January 2018. Both shifts carried HR implications for industry colleagues.

On the up side, this year marked more strategic partnerships between traditional and digital media companies, an incredible swath of major brand involvement in (and reliance on) the space, and the increasing importance of esports as a growth area.

The bottom line: The growing pains of a maturing ecosystem can be tough for talent, the kind in front of the camera and behind the scenes, and for entrepreneurs themselves. It’s difficult to watch colleagues, customers, and friends have to make tough choices and seek new opportunities. But we’re confident that in time, the industry will settle in a positive way. The incredible projected growth of the influencer marketing industry, the rising popularity of branded content, and the continuing dependence of advertisers on YouTube and Facebook (as TV declines), present opportunity for all of us who are active in the online video industry.


What do you think were the biggest digital media events of 2017? Share in the comments below!

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MCNs Are Happening. They’re Also Evolving (And That’s a Good Thing).

Forbes digital media contributor Tom Ward recently made some observations on the evolution of multi-channel networks or MCNs–“Stop Trying To Make MCNs Happen (It Ain’t Working)”–that got our attention here at Paladin, and we would like to add another perspective to the conversation.

We maintain that MCN isn’t a dirty word, and–to invoke Mark Twain–reports of its demise are greatly exaggerated. While there are market corrections taking place that are improving the business model, that doesn’t mean it has failed.

The Semantics of MCNs

In his op-ed Mr. Ward notes that some are critical of the term MCN because video has been embraced by social platforms outside of YouTube, where a creator profile is dubbed a “channel,” rendering the “multi-channel” aspect antiquated. A popular alternative is to label a social video-focused company as a “multi-platform network” or “MPN.” This is a semantic distinction that can, in fact, be a misnomer. A network, digital studio, or combination of the two that is built around online video creators can certainly exist solely on YouTube or include social platforms like Instagram or Snapchat.

Further, MPN is sometimes used to describe companies that are building their own distribution platforms. While a few, such as Fullscreen, are focused on creating their own subscription video on demand (SVOD) services, most leverage existing platforms from major social media companies. They work with creators and content across multiple distribution channels. Thus, multi-channel still fits just fine.

The Good, The Bad, and the Great of the MCN Model

When YouTube was new, MCNs were conceived as collaboration groups where emerging video influencers could create content together and help promote one another. Each creator contributed a percentage of advertising earnings to support funding of the MCN, which in turn provided talent management infrastructure and production resources. A rising tide lifts all boats.

This model gained momentum quickly, catapulting nascent channels into stardom and producing unheard-of growth in views and engagement. In time the paradigm shifted to provide such benefits at scale, and seemingly overnight MCNs went from small groups of several dozen influencers to VC-funded hot commodities aggregating tens of thousands of channels.

These huge MCNs found that collaboration, production, and creative services are difficult to provide at that scale, and pivoted to providing services in tiers. Entry-level creators could join and benefit from technology to help them create and grow, and larger creators could benefit from white-glove services. But the cracks in the scaled model began to show.

Here are a few:

●      Most MCNs do not have technology in their DNA, and that’s a key component of providing talent with financial transparency and creative tools as well as managing a scaled business.

●      Smaller creators have felt burned after signing multi-year exclusivity contracts with the expectation that they would get hands-on services from their network and interact with their favorite YouTubers.

●      Scaled networks made of small creators also mean smaller revenue share contributions to the MCN’s bottom line, and only a minority of signed creators grow substantially.

Luckily, markets evolve. It is now common for an MCN to derive most of its revenue from a combination of talent agency services, branded content sales, and digital entertainment production and syndication. Cultivating multiple high-margin revenue streams in the influencer economy is the name of the game.

MCNs continue to provide hands-on services to creators, but are focused on making these high-value and scalable. This can mean releasing talent from their network who are inactive or not growing. The total number of influencers in a network is now seen as a vanity metric of little importance, as a few top influencers can often have more reach and engagement than the combined low-viewed masses.

On that note, the recent reduction in the Maker Studios network has given way to naysaying about influencer networks. The fact remains that an MCN can have 100 creators or 50,000. Both are valid, and there is still viability for the scaled model.

Many networks run a successful scaled business on revenue share margins – even if they are small – driven by volume. The key to their success is transparency in the services offered, and being a responsive and well-intentioned operator. The value proposition is assistance with growth and helping a burgeoning creator become a creative professional. It is not uncommon for small creators to outgrow a scaled MCN and move on to another with more high-touch services, and in fact this is a signal that the scaled network has done its job well.

International Expansion is Huge

The global MCN business is robust, demonstrating continued growth in EMEA, APAC, and Latin America as mobile broadband and smartphone usage grow internationally. Often these MCNs are focusing on geographic, language-specific, or content-specific niches to better corner regional audiences and appeal to local brands.

These boom markets are catching up to where some of the first (U.S.-based) MCNs began, before they became investment or acquisition targets for traditional media companies, while taking key learnings from successes and failures of the model in Western markets.

Higher Standards Are Not a Bad Thing

At this stage in the evolution of MCNs, influencers have the right to expect high quality service from any network they sign with. They are increasingly aware of this, and some choose to flex their muscle if they’re not getting enough in return for a revenue share. This forces MCNs to compete on value added. When this happens, both the industry and creators win.

The Influencer Economy Isn’t Going Anywhere

We agree with Tom Ward that the influencer business is changing, but it’s not going anywhere. MCNs continue to provide services that creators are buying, and to offer a reasonable business proposition for online video entrepreneurs. As long as there are viewers, brand advertisers, and creators who interact in the social video space, there will be an ecosystem around it. Don’t count out MCNs playing a key role in the video future.


If you’re looking for tools to help manage and scale your MCN, click to learn more about Paladin’s Network Management Suite.

If you’re looking for tools to help find influencers for brand campaigns and network recruitment, check out our Talent Locator.

If you’d like to track and monetize your IP across YouTube, click for details about our Rights Monitor.

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