Twitter Beats Facebook to the YouTube Punch

By Markets Fool.com

Image source: Twitter.

Continue Reading Below

Alphabet's (NASDAQ: GOOG)(NASDAQ: GOOGL) YouTube has turned homemade video into a cottage industry with its content monetization tools, but now Twitter (NYSE: TWTR) is crashing the house party.

Twitter and Facebook (NASDAQ: FB) have embraced the growing popularity of user-generated video content on their platforms, but they have been slow to provide the financial incentives to encourage original content -- something that Google's YouTube has been doing since 2007, when it launched the YouTube Partners program.

Twitter is trying to catch up. Late last year it rolled out a revamped version of its Twitter Amplify program, allowing major entertainment brands to have pre-roll ads inserted in clips promoted on the site. Twitter and the tweeter split the resulting ad revenue. Initially, Twitter Amplify was limited to media bigwigs including MTV, Sports Illustrated, and BuzzFeed, but that's changing. TechCrunch is reporting that Twitter Amplify is now opening itself up to individual creators.

Party of one

Twitter users who are approved for the program can then simply check off a box on videos when they want to add a short advertisement before the clip starts. This certainly isn't as fancy as what Alphabet lets YouTube users do. They can go beyond skippable video ads to also slap ads that appear as "cards" on the side of clips. They can also have display ads on the side of the clips, as well as overlay spots on the lower part of the video during desktop viewings.

Continue Reading Below

Twitter clearly has a long way to go before offering the same kind of seamless monetization possibilities as YouTube, but for folks who have larger followings on Twitter than subscribers on YouTube, it could be a game changer. It would at the very least be incremental to an overall media distribution strategy.

There are no guarantees that it will be successful. Alphabet has been training YouTube users to expect ads for almost a decade. We don't know if Twitter users will generally be patient enough to wait through ads.

Facebook, on the other hand, doesn't appear to be in any kind of hurry. It knows that its 1.71 billion monthly active users will share videos with their families and friends without a financial incentive. Despite Twitter's Periscope, Facebook, and YouTube all offering platforms for live-streaming, it always seems that Facebook is where the news-making streams are being broadcast.

"We are a tech company, not a media company," Facebook founder Mark Zuckerberg said at a town hall meeting over the weekend.

And so his company is letting Twitter strike costly content deals with sports leagues and other content providers, while Twitter and YouTube roll out the means for content creators to get paid. It's hard to argue with Zuckerberg's success, but it's hard to dismiss a hungry Twitter and a successful YouTube from doing a better job of appealing to the moneymaking instincts of content creators.

A secret billion-dollar stock opportunity
The world's biggest tech company forgot to show you something, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Rick Munarriz has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (C shares), Facebook, and Twitter. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.