Wednesday, December 30, 2015

YouTube Enters into Crowdfunding

written by 
Crowdfunding Expert
Updated December 08, 2015.
Appeared in crowdfunding.about.com on December 08, 2015
Quietly, Google has been making its way into crowdfunding in a big way (What is crowdfunding?).
It hasn't done so by launching large, splashy rewards-based crowdfunding platforms like Kickstarter or peer to peer lending networks like Lending Club. 
Instead, Google is placing its bets on existing platforms with money from its investment arm, Google Ventures. And rightly so, Google is positioned atop a list of the top investors in crowdfunding and it's done so with investments in equity crowdfunding platforms Angel List and CircleUp and peer to peer lender, Lending Club.
Lending Club's CEO, Renaud Laplanche said about Google's investment in his firm:
We believe our relationship with Google will be very helpful in better serving our customers. We couldn’t be more excited to have them on board.
When you look at Google's investment activity in the crowdfunding space, it's clear that the firm believes in the potential of crowdfunding. But some news that the search/technology firm dropped today may point to a more hands on approach it will be taking to crowd funding in the future.

Google Announces That YouTube Will Launch Crowdfunding
With a video and blog post, Google announced some new changes it would be making to the creation tools for publishers of videos on its video network, YouTube.
One of those changes would be that YouTube would be joining the crowdfunding excitement.
Here's why: Google monetizes the billions of videos watched on YouTube by showing advertisements to viewers. In turn, YouTube shares those revenues with the producers of such videos. But here's the thing: a lot of those videos are made to promote products and services sold off of YouTube.
Once someone clicks off a video, YouTube loses the opportunity to make more money off a user.
So, this new announcement that Google would begin providing a mechanism for viewers to directly pay the makers of videos on YouTube changes the rules of the game.
YouTube Product Manager Rehan Ratnatungha explained:
“The problem is, a lot of this funding happens off YouTube. So I’ve been thinking about we can do this directly on YouTube, allowing fans to fund the creators that they really love.”

How will YouTube inject crowdfunding into videos?

Sources say that many content creators on YouTube have voiced their frustration that advertising revenues have been dropping over time. That's actually lead to a few of the larger publishers to leave YouTube in search of better revenue-producing platforms.
YouTube -- and parent, Google -- recognize the potential size of the crowdfunding market (expected to be worth hundreds of billions of dollars in the future), so it's working hard to collaborate with the Kickstarters and Indiegogos of crowdfunding. 
Unfortunately, Google's announcement didn't give more details on what crowdfunding would look like or how crowdfunding would work on YouTube, but that hasn't stopped analysts, journalists, and bloggers from speculating.
YouTube has been cooperating with crowdfunding sites for some time; Kickstarter and Indiegogo were some of the first external websites that video producers could link to via video annotations. The video service didn’t offer any additional details on what its own crowdfunding features will look like, but given that history, it’s possible that YouTube will try to complement Kickstarter rather than directly compete with it.
If people can put a few bucks in the virtual tip jar without visiting another website, that could be more convenient.
The iconic Veronica Mars stands as an industry touchpoint  for the power of crowdfunding to finance films that may have not found studio backing.  While there is no indication YouTube is getting into the film production industry for tentpole movies – a successful funding structure would certainly aid in setting a strategic tack to head in that direction.
Whether it's financing new forms of movies or just providing a mechanism to donate money to video creators, it's clear that Google is intent on investment more money -- and resources -- into ensuring that it's a dominant force in the crowdfunding industry.






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