Two companies with their eyes on YouTube personalities that have attracted large followings are making Google feel uncomfortable, a new report claims.
Over the last several months, Google has been actively striking deals with personalities on the popular video site YouTube in hopes of keeping the talent on its video service and not signing similar deals with competitors, the Wall Street Journal is reporting, citing people who claim to have knowledge of its activities. Google is specifically concerned about the world's largest social network, Facebook, and new video-subscription startup Vessel.
According to the Journal's sources, both Facebook and Vessel have been actively targeting popular YouTube personalities to get them to sign exclusive deals and produce video content for their services. That could mean a hefty loss of video viewership on YouTube and eventually hurt the company's ability to generate ad revenues.
While YouTube started as a user-generated content destination, since Google acquired YouTube in 2006 for $1.65 billion, the search company has been trying to find ways to generate more income. Central to that effort has been finding popular professional video content and monetizing it. Not surprisingly, other companies have seen the popularity of some personalities and want to steal them away from Google and YouTube.
According to the Journal, Google is offering YouTube personalities multi-year deals that offer them bonuses if they hit certain viewership milestones. In return, the personalities are required to provide exclusive content to YouTube for a period of time before they start to offer it anywhere else. Google's YouTube is even willing to fund additional content, the Journal's sources say.
"We've invested in YouTube creators for years, and have been increasing that support through a broad range of activities including marketing and content funding," a Google spokeswoman told CNET. "We will continue to recognize and value the creativity of our top talent."
While Facebook is an obvious threat to YouTube, Google is by far more concerned with Vessel, the Journal's source says. The startup, which has yet to launch, is co-founded by former Hulu CEO Jason Kilar. In his previous role, Kilar helped build Hulu into a popular subscription video destination that centered on professional content. With Vessel, Kilar is looking for "video content creators" and has a sign-up page on the site where current distributors can contact Vessel to see how they can become part of the startup.
That Vessel is such a concern to YouTube is somewhat surprising, considering the service hasn't even launched yet and there is still many question marks on how it will work. However, Vessel has been able to attract major venture capital firms, including Benchmark, Greylock Partners, and Amazon CEO Jeff Bezos, to collect funds and target content creators.
According to the Journal's sources, Vessel is willing to pay an advance on videos and has said that it will provide a better platform for professional content than YouTube. In addition, Vessel requests three days of exclusive programming before clips can be added to other sites, including YouTube.
Neither Facebook nor Vessel immediately responded to a request for comment.