October 12, 2016:YouTube buys FameBit to connect creators with brands

Music rightsholders are continuing their efforts to squeeze greater per-stream payouts out of YouTube, but in the wider world of YouTubers, the real money has been in brand partnerships for some time now.

From vloggers and gamers to makeup experts and pranksters, producing sponsored videos and working with brands in other ways has become an important source of income, with YouTube taking a hands-off approach.

Well, it was hands-off. This week, YouTube bought a company called FameBit, an “influencer marketing platform” that specialises in matchmaking brands and online-video stars – to the tune of more than 25k videos and 2bn minutes of viewing in the last three years.

“We believe that Google’s relationship with brands and YouTube’s partnerships with creators, combined with FameBit’s technology and expertise, will help increase the number of branded content opportunities available, bringing even more revenue into the online video community,” blogged YouTube’s VP of product management Ariel Bardin.

For now, YouTube is stressing that “creators will always have the choice in how they work with brands” – translation: it won’t be forcing YouTubers to use FameBit and thus give YouTube a cut of their branded-content income. Sceptics will be keen to see that promise maintained in the long term.

But the bigger picture here is that YouTube is ready to take a bigger role in boosting brands’ spending on its platform beyond regular ads. Twitter pulled a similar move back in early 2015 when it bought a startup called Niche.

Is there a music angle here? Maybe. Under YouTube’s wing, FameBit could certainly help musical YouTubers find suitable brand partners. In theory it could also work with labels, although in practice, all three major labels already have efforts underway to work with brands on various kinds of online-video content, and may prefer to focus on that.

Also note that brand/video partnerships aren’t just a YouTube thing: Facebook, Instagram, Snapchat, Twitter… There are lots of opportunities in this area for partnerships that run across platforms, which FameBit may now be less focused on running.

But if you boil this news story down to its most basic point: YouTube acting on the fact that per-view payments based on advertising can’t be the only income stream for creators on its service. An approach that, for all the anger around music’s ‘value gap’, labels are already adopting.

Stuart Dredge
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