YouTube dominates in video hosting, but that won’t be the case forever. Competition will emerge from both likely and unlikely players. And that’s a GOOD thing.

Is the demise of YouTube closer than we think?

Crazy question. Let me back up.

YouTube is an amazing platform. Certainly the most impactful platform in online video to date. So much of our world is shared via YouTube videos - at this point, 100 hours of video are uploaded to YouTube per minute! Its growth, in terms of content and viewership, is second to none…

But NO ONE, even YouTube, can keep that up forever.

Already, we are seeing signs of attrition on YouTube, as guys like Jason Calacanis leave the platform for better opportunity elsewhere. In a takedown post he penned on Sunday, Jason goes into the depth of why YouTube is amazing … and why he turned down YouTube’s funding for the greater opportunity of striking out on his own.

Jason is not the first, but his departure is a strong indicator for anyone in the video ecosystem and it became a double whammy when a rumor surfaced that outright video-hosting competition will soon emerge from the likes of Maker Studios, which has built its entire business to date ON YouTube. 

So … What might the future hold? 

Competition is coming.

  • My prediction is that we’ll see a blend of different types of competitors. Some existing (Vimeo, Blip), some climbing the ladder of the disruptive innovation model (Maker, Machinima, et al), and some completely new.

Competition will come from all sides.

  • How could anyone compete with YouTube you ask? Yes - video is expensive to host and stream, but data continues to get cheaper by the second. More importantly, a new competitor doesn’t have to compete with ALL of YouTube. If Machinima, Maker, Fullscreen or any one of them break free, taking their talent and channels with them, they could focus all of their effort on building a new platform - JUST FOR THEIR AUDIENCE - with all the bells and whistles they’ve always wanted, and never had, with YouTube. Just imagine how much the audience would love it?! (Guess what? We’ve seen this story before). Finally, and most importantly, there IS at least one competitor with deep enough pockets to play this game at scale, and that’s Facebook. Yup. I think Facebook is getting sick of watching YouTube videos be so dominant in their News Feed, meanwhile video ad CPMs are the best ad rates on the web and they want a piece of that pie.

Competition is great for video and viewers alike.

  • Really. It is. With YouTube dominating this space, commanding ~50% of any revenues right off the bat, it’s nearly impossible for content creators to make a real business. Competition doesn’t necessarily fix all of these things, but new entrants mean new ideas, and teams put to the test will have to come up with innovative business solutions to accompany their great tech. And more importantly, it’s better for the consumer -  the person who just wants to see great video, and wants an easy way to do it.

From my perspective, this could all be great for the ecosystem, even necessary for a balanced, healthy existence, but it’s not going to happen overnight and it’s certainly not going to follow any particular script that we’ve seen before.

All us little guys can do is embrace the chaos and change of the industry, while creating our own value for you viewers at home.