Earlier this year at VidCon, Upfront Ventures partner (and Maker Studios investor) Mark Suster explained that the biggest threat to YouTube wasn’t Vimeo, or Blip, or Netflix; it was actually Amazon, the e-commerce giant that also operates a growing subscription and pay-to-play video business.
It seems that the Seattle-based company took Mr. Suster’s keynote presentation to heart. Expanding on its rapidly growing slate of original and licensed TV programming, Amazon has recently approach several YouTube multi-channel networks with a proposition to join its Instant Video service, AdAge reports.
Amazon is rumored to have offered partners pay-per-video options as well as branded channel pages. One source cautions AdAge that many of the deals have been put on the backburner until 2014.
Saddling up to MCNs would put Amazon in direct competition with YouTube, which to date has been an unrivaled force in short-form online video. While Amazon continues to beef up its roster of long-form content (originals, movie downloads, etc), the company — and its contemporaries — have taken only small steps in tapping the vloggy shores of YouTube-centric content.
Amazon’s proposal comes at a time when many MCNs have become disenfranchised with YouTube’s current business practices. The Google-owned site’s 45/55 revenue split has been referred to as “absurd” by entrepreneur Jason Calacanis, who made waves earlier this year after posting a screed, which rebuked YouTube’s long-term viability for networks. Apart from the high revenue split, Calacanis also suggested that YouTube’s total control of ad buying with no internal sales force shifted business far out of networks’ hands.
With this Amazon news still very much in the early stages, it is difficult to tell whether or not Amazon will provide networks with a more favorable deal, or if the site’s proposed partnership would come with exclusivity (probably not). However, as AdAge points out, the pressure that Amazon seems to be placing on YouTube could be beneficial to networks. Now with multiple sharks in the tank, YouTube may have to reevaluate how it treats its partners.