Taking on internet platform bullies 👊

This week’s Cybercultural newsletter looks into internet platform dominance in the cultural sectors. I examine three recent news stories on this theme. In the first one, YouTube’s bullying tactics over its competitors and partners are laid bare. But two other, more positive, stories show how challengers constantly arise to take on the big internet platforms: TikTok is the latest Next Big Thing in online video, while newly funded newsletter platform Substack is helping creators route around social media.

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How YouTube stamped out the new MTVs

Bloomberg reports this week that several ex-YouTube partners - including advertising company AppNexus, the music industry collaboration Vevo, and video content network Machinima - are seeking “antitrust revenge” on Google for damaging their businesses. Indeed, in the case of Machinima, effectively driving it out of business altogether.

It’s another stark reminder of the power of the leading internet platforms. Seven years ago I wrote about Machinima for ReadWriteWeb, calling it “the most successful video content producer” on YouTube. The content was geared towards young male gamers, so it was a precursor of Twitch in a way. At the time, 2012, it was being positioned as the Web version of MTV - in other words, a specialist content network.

However, unlike MTV, Machinima was overly reliant on a distribution partner: YouTube. In the ensuring years, YouTube put the squeeze on:

“YouTube executives didn’t want third parties getting in between viewers, video creators and advertisers, according to former MCN [multi-channel network] executives and employees. So YouTube made MCNs superfluous by replicating many of their offerings, while limiting their access to data and tools that would have helped them build their own businesses, these people said.”

Machinima eventually dissolved into corporate M&A nothingness - it was acquired by Warner Bros in 2016, which in turn was acquired by AT&T in 2018. Machinima’s content and channels disappeared from YouTube altogether in January of this year.

Is TikTok relevant to the cultural sectors?

Now we turn to another in a long line of wannabe YouTube competitors (see above for how that usually turns out). This one is currently turning heads for its popularity with kids and teenagers.

TikTok is a Chinese app that launched in the US last August and is growing rapidly. The app allows users to upload fun 15-second videos, often accompanied by music or voiceovers. It’s the video platform “everyone is talking about” now, according to Taylor Lorenz from The Atlantic. Although she rightly warned that TikTok’s current hype may quickly dissipate:

“Of course, many other social apps have launched to great fanfare, only to fade out in a year or two. To remain successful, TikTok will also have to provide scalable ways for influencers to make money on the platform. That could mean paying creators directly for content, helping them negotiate brand deals (such as the Chipotle integration), or adding e-commerce capabilities, as Instagram recently did. And while teenagers can help solidify a platform’s space in the culture, young people are notoriously fickle and quick to abandon apps when a new platform comes along.”

My take: you can never discount any new social media phenomenon with hockey stick growth, even if it eventually flames out like Color or Meerkat. Brands are already on TikTok because of its popularity, and so cultural organisations may find similar PR value. Just as with Instagram, TikTok could be a marketing tool worth exploring if you’re targeting young audiences.

But from a content perspective, let’s be clear about what TikTok is and what it isn’t. It is a platform for 15-second videos that entertain young people and encourage social interaction. It is a platform for creative expression. But it isn’t a platform for cultural content; which is fine, because TikTok and its users aren’t trying to be that. Just enjoy it for what it is.

Substack vows to rescue us from the clutches of social media

This week newsletter company Substack announced it has raised $15.3 million in a Series A funding round led by venture capital firm Andreessen Horowitz, with participation from existing investor Y Combinator. [Disclosure: Cybercultural uses the Substack platform.]

On reading this news, I cheekily asked Substack’s founders for an advance. But seriously, the funding is interesting from a cultural point of view because what Substack is building is - in the words of Andreessen Horowitz partner and newly minted Substack board member Andrew Chen - “a new business model for culture.”

On the Substack blog, the funding was positioned as a way to empower both creators and consumers. That implied it was also a way to de-power social media platforms like Facebook and Twitter, which have dominated media distribution in recent years.

“We believe that letting writers connect with their audiences on their own terms, and letting people subscribe to and support writers directly, puts the power where it belongs: in the hands of readers and writers. It's a model that can help build a better culture.”

As well as distribution, Substack is also trying to offer an alternative business model to online advertising (where both Google and Facebook dominate). Although I have to say, as a creator, I know all too well the difficulties of getting 1,000 paying fans - which Substack holds up as the standard measurement of success on its platform. Regardless, I admire what Substack is attempting here and I hope it does turn into the next business model of culture.

Related: coincidentally, Patreon also announced a new funding round this week. The membership platform raised $60 million in Series D funding.


Tracking 👀

  • Textbook publisher Pearson is switching to “a digital first model, effectively killing future print editions of its college textbooks,” says PublishersWeekly. Pearson is labelling this “product as a service.” 📚

  • Choreographer Wayne McGregor has collaborated with Google Arts & Culture to develop “an AI-powered tool that creates original dance movement,” reports LA Times. It’s one of the coolest AI-arts collaborations I’ve yet seen. 🕺

  • At its VidCon event, YouTube announced Super Stickers - animated stickers that viewers can purchase and deploy during live streams. It’s another way for creators to make money, and complements the existing “Super Chat” offering. 📹

  • James Murdoch has invested $20 million in The Void, which provides VR experiences at select locations (e.g. Santa Monica, Toronto). As Bloomberg notes, it’s the latest addition to Murdoch’s entertainment and tech-focused fund, Lupa Systems. 💰

  • Penske Media Corporation (PMC) has acquired Art Market Monitor, eight months after it bought ARTnews and Art in America. Notable because PMC has scooped up a number of prestigious (and increasingly digital) media brands in recent years, such as Rolling Stone, Variety, and Robb Report. 🎨


Data Points 📊

  • New MIDiA Research report: independent musicians (artists without record labels) generated $643.1 million in 2018, up 35% from 2017. 🎹

  • Publishing Perspectives: Audio Publishers Association reports that US audiobook revenue in 2018 grew by 24.5 percent to US$940 million. 🎧

  • GamesIndustry.biz: Twitch growth dips as Fortnite viewership continues to decline (RM: but both are still incredible businesses!). 🎮

  • Financial Times: Amazon becomes fastest-growing music streaming service; Amazon Music Unlimited's subscribers grew ~70% in the past year (to 32M+), compared to ~25% for Spotify. 📻

  • Hollywood Reporter: Young audiences are driving growth in demand for subscription video services (SVOD), with the U.S. market reviving and Europe quickly catching up, a report from Ampere Analysis finds. 📺


Tweet of the week 🐦

Washington Post’s resident millennial Dave Jorgenson shows us our TikTok media future:


That’s a wrap for another week. A reminder that I’ve opened my inbox to consulting enquiries, so do reach out if you’d like me to dig deeper into a specific sector.

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