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As frustration with YouTube mounts, ShowYou makes a play for publishers

As frustration with YouTube mounts, ShowYou makes a play for publishers


The video app will now let anyone create a channel and advertise on it.

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Video discovery app ShowYou was created to help users keep track of all the videos being shared across their social networks. But like most video app developers, including the market-leading YouTube, it has struggled to replicate the easy viewing offered on cable, Netflix, and Hulu. Most people prefer to watch a single 30- or 60-minute program than string together shorter clips, even when those clips are professionally produced.

Today ShowYou is trying to change that with an update to its app that lets anyone create a channel of videos, which can be browsed and followed in a manner similar to the curated "magazines" in Flipboard. As with Flipboard, ShowYou’s bigger play is for old-time publishers, trying to help them generate new revenue from content they have already produced.

"If you are a content company trying to build a ‘YouTube business,’ you are investing in your own demise."

Its transformation into a distribution hub comes at a time when publishers are eager to find new places to distribute their work. This weekend, in a widely read blog post, entrepreneur and YouTube partner Jason Calacanis urged his fellow video makers to find alternatives. With YouTube taking a 45 percent cut of its partners’ revenues, he wrote, it is nearly impossible to earn a profit based on YouTube views alone. “If you are a content company trying to build a ‘YouTube business,’” Calacanis wrote, “you are investing in your own demise.”

YouTube declined to comment on his post. But Calacanis gave voice to simmering concerns among some of YouTube’s top creators that the platform exacts too high a price from the revenue-sharing agreements it makes with partners. That’s one reason that the people behind popular channels are hedging their bets by publishing their videos on sites like Vevo TV, Blip, and Rocket Jump, which let them to keep a higher percentage of their ad revenues. The sites also help the channels’ stars develop an identity outside of YouTube. “Some folks struggle because the’ve got all their eggs in one basket,” said Michael Cerda, Vevo’s senior vice president of product and technology. Vevo, which offers music videos from three of the big four music labels, can afford to build its own property. Smaller publishers can’t.

ShowYou’s pitch goes something like this: mobile is the future, mobile is hard, and mobile is something we’ve already figured out. The updated app puts a new emphasis on channels, so that once a viewer has picked one, swiping to the left or right brings up the next video in the channel. If the user does nothing, the next video in the channel autoplays as soon as the current video ends. (That’s not the case at YouTube.)

The publisher can insert video ads into the ShowYou stream, but instead of sharing revenues with ShowYou, they pay the company a monthly fee as low as $5. The videos can be hosted anywhere, YouTube included; publishers just give ShowYou the feed.

“Think of us as the browser,” said Mark Hall, ShowYou’s founder and CEO, in an interview at the company’s offices.

"It's a browser with built-in social distribution."

“But it’s a browser with built-in social distribution, a browser with intelligent discovery, including recommending people to come to your channels.”

Meanwhile, users get a single place to browse, watch and share videos that are now fragmenting across more and more websites. Most of the big content creators continue to publish their videos to YouTube, of course, since that’s where most of the audience remains. But there’s plenty of high-quality video that isn’t on YouTube, and Hall says people want a central app where they can find it.

For now, Hall won’t say which of the big publishers are building channels in ShowYou. Most of them are doing it as an experiment, he said, and no one wants to risk offending YouTube. And while publishers have little to lose by creating a channel on ShowYou — it will be free to them for at least the next three months — it’s also not clear how much they have to gain. For the app to make them money, it needs to attract millions of users. It doesn’t have them yet.

“It’s ridiculously ambitious for an eight-person team,” Hall said, grinning. “We’re fully cognizant of that. We’re doing something that’s a little crazy given our scale. But why not?”

For its part, YouTube is adding new ways for publishing partners to make money. Last month, the company introduced paid subscriptions onto the service. And Google continues making the case that its own mobile strategy is paying off, both for itself and its partners. On Wednesday, a YouTube executive told Bloomberg that mobile advertising revenues have tripled in the past six months, to an estimated $350 million.

Jason Krebs, president of sales and marketing at Blip, said publishers’ hunt for better distribution channels is only beginning. “The future is distributed,” he said. “Producers will have more opportunity to choose distribution partners they want to work with based on the economics and audience impact. It’ll just continue to evolve that way.”