David (The Creator) vs Goliath (Hollywood)

There is a trickle-up effect for Hollywood where the more stars are produced from online video, the more deals they will ink with traditional forms of entertainment. Hollywood sees YouTube and digital media stars as a new source of talent, an overflowing well of demographically defined future stars. But the more powerful online-video technology and stars get, the less they’ll need Hollywood. YouTubers Joe Sugg and Caspar Lee (along with a startup UK production studio) recently shot and released a movie with the highest number of pre-orders on it’s first day ever on Amazon UK. This may seem like a small milestone against the might of Hollywood and the billion dollar success of movies like Fast and Furious 7. But it’s significant when you think of the future potential for smaller players to successfully make and distribute TV Shows and Movies, and control most, if not all, of the process end-to-end. Outside TV and Movies, YouTubers’ books have outsold JK Rowling and YouTubers’ iOS games have risen straight to the top of the App Store’s paid charts. Both successes relying mostly on the influencers’ own channels, with global reach, rather than traditional marketing machines. Those who think these emerging trends won’t hurt the less blockbuster properties in Hollywood, consider these potential scenarios over the next 10 years (20 if you’re pessimistic):

Virtual Reality (VR) becomes mainstream.(1)

Cinema (as we know it) dies.

Cable TV bundle dies.

YouTube Red (YouTube’s new subscription video service) globally and successfully distributes homegrown movies and TV Shows from their homegrown stable of stars. RoosterTeeth (Lazerteam Movie), Lily Singh, PewdiePie, Toby Turner and others are already starting to release content this way.

When/if any one of these scenarios are realized, the delivery models for entertainment will have changed on a fundamental level. Would you bet on those leveraging technology or those resisting it, when it comes to capitalising on this evolution of distribution?

Maybe you don’t think licensing/restriction road-blocks, for products like YouTube Red, will go away overnight. I agree. Red itself is scheduled for a staggered release, first in the US on the 28th October, and then in early 2016 for most of Europe. However thinking longer-term, YouTube Red original content shouldn't have anywhere near the same volume of licensing/distribution issues that conventional TV and Movies do. Netflix, an another example of a worldwide distribution platform, is increasingly acquiring global distribution rights for its TV shows. And once Red, as a service, is available in as many countries as YouTube currently is, global synchronised releases of entertainment should be more normal due to four factors:

This is YouTube/Google’s strategy. Their new partner agreement (that 99% of partners have signed) enables YouTube to cast a broad licensing/distribution net over all the content on their platform. If you’re a publisher/creator that posts videos that are available on a region specific basis? YouTube does not want your content (just ask ESPN!). It’s intentionally building a future of globally and simultaneously-available entertainment. Foreign distribution rights and schedules become less important when you have one or a handful of global, online-video distribution platforms e.g. YouTube. Foreign rights are/were very important for cinemas and material copies of media property, not so much for digital-first content, produced and delivered by a single, global company. As piracy becomes increasingly difficult to combat; single, global releases may be favoured over multi destination releases. Marketing for online video content is very different than conventional TV/Movie marketing. Online video stars market themselves through their own numerous, mostly unpaid channels. At the top level these channels are truly global in terms of fan-bases, meaning there is less need for region-specific marketing. Traditional TV and Movies on the other hand tend to rely heavily on advertising and press junkets requiring much more man-power and travel. This necessitates staggered releases to ensure a movie/TV show does well in multiple regions.

Roadblocks like GEMA in Germany (although mostly focused on music video protection) and China’s internet censorship may also staunch some of the global availability mentioned above. Please tweet at me with other examples of licensing/distribution complications that may hinder the simultaneous global availability of products like YouTube Red.