Yahoo! Inc. (NASDAQ:YHOO) has been in talks with video producers of late in order to create and launch a video service later this summer that, in theory, could rival YouTube.
The debut of the service has been slowed by contractual issues as Yahoo! Inc. (NASDAQ:YHOO) had hoped to unveil the service for potential advertisers last month.
Yahoo’s pitch to video creators is simple: more favorable revenue sharing deals currently in place at YouTube and fixed ad rates that are considerably higher than YouTube offers given a lack of a real rival.
Why?
While this, on the surface, is sure to impress those that have built a following on YouTube; it doesn’t change the fact that YouTube is the most prevalent video hosting site in the world and simply copying it with promises of higher revenues for creators is bold(ish). Just like YouTube, Yahoo’s service will allow creators to build their own “channels” while allowing users to embed Yahoo’s player on third-party sites.
What Yahoo can, however, offer those that sign on a contract with them that Google cannot is access to blogging network Tumblr.
While it’s unknown what Yahoo! Inc. (NASDAQ:YHOO) is specifically offering video creators, it’s meant to be considerably better than the existing split on YouTube where Google takes 45% of ad revenue. On fixed adds, Yahoo is reported to be offering 50% revenue sharing with creators, a 100% increase on Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL)’s present offer for those that produce content for YouTube.
Yahoo, which has for the most part declined to comment on its plans, is not asking creators to sign exclusivity deals by rather is content with videos being uploaded to both services but it’s believed that Yahoo is offering producers incentives to upload at Yahoo’s new service first.
Rankled creators
Yahoo CEO, Marissa Mayer, has made no secret of her interests in building Yahoo’s video business. Just last year, Yahoo tried to purchase both Dailymotion and Hulu, the former acquisition was blocked by the French. TV in the United States is big business, $70 billion, and Yahoo has recently increased the volume of ads running on its videos. Additionally, Yahoo announce its plans to produce its own TV-length original series on its Screen service.
Contract talks have been delayed with good reason and center around ownership. Yahoo has asked producers to give them a perpetual license to all videos shared to Tumblr, an agreement that would see creators essentially giving Yahoo! Inc. (NASDAQ:YHOO) ownership of their created content.
“I’ve never seen anything like that in my life, and I’m assuming they’re going to strike that [from the final contracts],” said one producer whose contract talks with Yahoo have gone through more than a few revisions. “Anyone who’s done a content deal knows that would never fly.”
Whether or not the world needs or wants more cat videos isn’t the point, Yahoo! Inc. (NASDAQ:YHOO) is, however, planning to make you say yes.
