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FTC votes to review influencer marketing rules & penalties

By Josh Constine

Undisclosed influencer marketing posts on social media should trigger financial penalties, according to a statement released today by the Federal Trade Commission’s Rohit Chopra. The FTC has voted 5-0 to approve a Federal Register notice calling for public comments on questions related to whether The Endorsement Guides for advertising need to be updated.

“When companies launder advertising by paying an influencer to pretend that their endorsement or review is untainted by a financial relationship, this is illegal payola,” Chopra writes. “The FTC will need to determine whether to create new requirements for social media platforms and advertisers and whether to activate civil penalty liability.”

Currently the non-binding Endorsement Guides stipulate that “when there is a connection between an endorser and a seller of an advertised product that could affect the weight or credibility of the endorsement, the connection must be clearly and conspicuously disclosed.” In the case of social media, that means creators need to note their post is part of an “ad,” “sponsored” content or “paid partnership.”

But Chopra wants the FTC to consider making those rules official by “Codifying elements of the existing endorsement guides into formal rules so that violators can be liable for civil penalties under Section 5(m)(1)(A) and liable for damages under Section 19.” He cites weak enforcement to date, noting that in the case of department store Lord & Taylor not insisting 50 paid influencers specify their posts were sponsored, “the Commission settled the matter for no customer refunds, no forfeiture of ill-gotten gains, no notice to consumers, no deletion of wrongfully obtained personal data, and no findings or admission of liability.”

Strangely, Chopra fixates on Instagram’s Branded Content Ads that let marketers pay to turn posts by influencers tagging brands into ads. However, these ads include a clear “Sponsored. Paid partnership with [brand]” and seem to meet all necessary disclosure requirements. He also mentions concerns about sponcon on YouTube and TikTok.

Additional targets of the FTC’s review will be use of fake or incentivized reviews. It’s seeking public comment on whether free or discounted products influence reviews and should require disclosure, how to handle affiliate links and whether warnings should be posted by advertisers or review sites about incentivized reviews. It also wants to know about how influencer marketing affects and is understood by children.

Chopra wisely suggests the FTC focus on the platforms and advertisers that are earning tons of money from potentially undisclosed influencer marketing, rather than the smaller influencers themselves who might not be as well versed in the law and are just trying to hustle. “When individual influencers are able to post about their interests to earn extra money on the side, this is not a cause for major concern,” he writes, but “when we do not hold lawbreaking companies accountable, this harms every honest business looking to compete fairly.”

While many of the social media platforms have moved to self-police with rules about revealing paid partnerships, there remain gray areas around incentives like free clothes or discount rates. Codifying what constitutes incentivized endorsement, formally demanding social media platforms to implement policies and features for disclosure and making influencer marketing contracts state that participation must be disclosed would all be sensible updates.

Society has enough trouble with misinformation on the internet, from trolls to election meddlers. They should at least be able to trust that if someone says they love their new jacket, they didn’t secretly get paid for it.

YouTube to invest $100M in kids’ content that showcases character strengths, like compassion and curiosity

By Sarah Perez

YouTube in September announced a $100 million fund to invest in new children’s video content, following its $170 million settlement with the FTC over children’s privacy law violations. The fund was meant to help soften the blow for children’s content creators on YouTube, who are being financially impacted by the changes the FTC required of their channels. Now we have the first bit of insight into what sort of content YouTube plans to back with the fund’s resources.

According to a report by Bloomberg, YouTube is looking to fund videos that “drive outcomes associated with the following character strengths”: courage, compassion, communication, gratitude, curiosity, humility, teamwork, integrity, perseverance, self-control, empathy and creativity.

The details were shared in a note to partners, the report said.

“All our programming will seek to support kids in uncovering their unique strengths and passions,” the note read. “Specifically, we want to develop content that inspires children to develop life skills and pursue their passions; establish healthy habits and care for themselves; increase their understanding of culture and diversity; and/or engage with and care for their community.”

YouTube confirmed the report’s accuracy to TechCrunch. It said the company is now in discussions with partners, but further details on the kids’ content fund wouldn’t be shared until later this year.

The planned $100 million investment, which will be distributed over the next three years, is meant to help set the tone for the sort of children’s video content YouTube wants to see more of on its video-sharing platform.  Today, a number of creators in the kids’ space are gaining views for things like toy unboxings, pranks and family vlogs. For example, Ryan Kaji of “Ryan’s World” and “Ryan ToysReview” was YouTube’s highest-paid star of 2019, pulling in a massive $26 million.

Parents, on the other hand, don’t often care for their kids’ addiction to this sort of lightweight, consumer-driven content. And thanks to updated screen time controls across iPhone and Android, they can now choose to limit the time their kids spend on YouTube. And with a growing number of streaming services on the market, including the kid-friendly Disney+, kids and families have other options.

The move to fund an elevated set of kids’ content could also help YouTube attract more advertising dollars, as companies are looking to pair their marketing messages with “brand-safe” content, which can be hit-or-miss on YouTube at times.

YouTube has no immediate concerns on the ad revenue front, having pulled in $15 billion in 2019. But the company knows there’s still so much more room to grow, given the TV ad market still massively dwarfs YouTube, with $70 billion in ad spending last year.

YouTube has seen soaring growth in South Korea

By Danny Crichton

Earlier this week, Google released revenue figures for YouTube for the first time in the product’s history, revealing that the video service pulled in $15.1 billion in advertising revenues in 2019. Growth was 31% year-over-year during the quarter — strong growth for such a late-stage property, but of course, everyone always wants more. The company also claimed that it had an audience of more than 2 billion users — making it among the most popular products in the world.

Part of that global success comes from countries like South Korea, where YouTube has long been a serious laggard to local video players, but which has managed to penetrate the market much more heavily in recent years.

According to the latest data from Wiseapp, an app usage and retail revenue data service for the Korean market which is sort of a fusion of App Annie and Second Measure, YouTube has seen dizzying growth over the past few years, particularly among older, non-millennial users.

Based on data from Android users, YouTube has seen consistent increases in unique users in the market, almost to a point of saturation. At the end of 2019, Wiseapp estimated that YouTube had nearly 34 million Android users, up 6% from 2018 and 38% from 2016.

Data from Wiseapp, exclusively depicting Android users

For context, South Korea has a population of about 51.5 million, and local polling from Gallup puts Android penetration at roughly 80% overall. One serious caveat here is that there is a huge age discrepancy between Android and iPhone users — iPhone penetration among twenty-somethings is nearly half, while its penetration among users over 50 is in the low single digits.

While YouTube has had users aplenty for years, what’s been striking has been seeing the increase in the average view time on the platform. Again, for Android users measured by Wiseapp, YouTube increased its total minutes viewed on its platform by 38% last year, and has seen 187% growth since 2016. The platform isn’t just getting more users, but deepening engagement with those users over time.

A Google PR representative would not confirm third-party data about the platform’s performance, but did say in a statement to TechCrunch that the hours of content uploaded to Korean YouTube channels grew by 50% between 2018 and 2019. The company also said that as of February 2019 (the most recent data available), “there are over 12,000 channels with over 10K subs, over 2000 channels with 100K subs and more than 200 channels with 1M+ subs in Korea.”

What’s changed in the local market? A handful of trends are lining up in YouTube’s favor, helping it break through local competitors for the lucrative online video market.

First and perhaps most importantly according to local sources, more and more creators have moved their businesses to YouTube from other competitors due to better creator economics on the platform.

As Cynthia Kim at Reuters discussed in a profile article last year about the changing job market in South Korea, “YouTube creator” is a new career path for some young people interested in focusing on their interests and expressing their thoughts online for income. From the article:

“Among elementary school students, YouTube creator is now the fifth-ranked dream job, behind being a sports star, school teacher, doctor or a chef, a 2018 government poll showed.”

As those creators have migrated to YouTube, so have users, or so the thinking goes. And so you see the number of popular channels increase, and the total number of video hours uploaded growing quickly to capture that increased usage.

Another dynamic at play is globalization. While many Koreans grew up watching Friends or Home Alone in their drive to learn English and compete effectively on the country’s harrowing college entrance exam, YouTube offers a much wider vista into all kinds of places beyond those depicted by Hollywood.

As one former senior Korean technology executive, who once managed a competing product to YouTube, explained to me, the challenge for local players is that they just don’t have the kind of global content library that is attractive for users. Local players have local content, and while engagement remains high, they lack the extended global content that platforms like YouTube can provide.

What’s interesting is that Korean globalization has also worked the other direction. Korean dramas and Korean pop bands like BTS have expanded dramatically in global popularity over the past decade. Google said in its statement that the top 25 Korean bands on YouTube now receive 90% of their views from outside the country.

In short, YouTube has broken into an app ecosystem that is almost entirely local, and has even done so in a tough demographic like older users which have been particularly impervious to non-Korean apps. Messaging app KakaoTalk remains the country’s most popular app, and the only other top-ranked foreign app is Instagram at number eight with an estimated 10 million Android users from Wiseapp’s calculation.

While some analysts were surprised at YouTube’s smaller than expected revenue numbers, it is clear that the platform is making headway in a variety of other international markets. As other emerging digital economies like India, Africa and Southeast Asia come online, expect even more competition in this category between this big global video product and local competitors.

Twitch’s loss of top streamers impacts hours watched and streamed in Q4 2019, report says

By Sarah Perez

The loss of several big-name streamers is finally taking its toll on Twitch, according to a new report from StreamLabs and Newzoo out today. In August 2019, top streamer Tyler “Ninja” Blevins, announced his intention to leave Twitch for Microsoft Mixer. Several others have since defected as well, including competitive gamer Michael “Shroud” Grzesiek who went to Mixer in October, Jack “CouRage” Dunlop who left in November for YouTube Live, and Jeremy “Disguised Toast” Wang who also left in November, but went to Facebook Gaming.

The loss of Ninja hadn’t impacted the amount of time Twitch users spent watching content on the platform as of Q3 2019, but the total hours streamed had slightly dipped. As of Q4 2019, however, Twitch’s momentum began to slow.

While the Amazon-owned streaming site is still by far the leader in terms of hours of content both watched and streamed compared with rivals with a market share of 75.1%, the number of hours watched on Twitch declined from Q3 to Q4 2019 by 9.8%.

This resulted in the lowest number of hours watched on the platform (2299.6M) since Q3 2018 (2283.9M).

That being said, Twitch overall is still growing on a year-over-year basis, with a 12% increase in hours watched on the platform in 2019 compared with 2018.

The high-profile losses are also now impacting the hours streamed on Twitch, the report found.

The platform in Q4 2019 saw the lowest number of hours streamed (82.7M) since Q2 2018 (86M). Again, the trend on a year-over-year basis is still climbing upwards, with a 16.1% increase in hours streamed in 2019 versus 2018.

Twitch saw declines in the number of unique channels streaming over the course of 2019, too, dropping from 5.6 million in Q1 2019 — the highest ever — to 3.7 million by Q4.

Concurrent viewers declined on a quarterly basis by 9.4%. This is the lowest average concurrent viewership figure since Q3 2018. On an annual basis, however, concurrent viewership was still up by 12.3%. The average number of viewers per channel was stable and has increased by 12.5% since Q1 2018.

YouTube Gaming Live, meanwhile, became the only platform to see increases in hours watched, streamed and concurrent viewership in Q4 2019.

CourageJD’s move to YouTube Gaming Live has helped to boost Google’s platform, but the increases can also be attributed to YouTube’s broadcast of top esports events and influencer moments.

The total number of hours watched on YouTube Gaming Live grew 46% from Q1 to Q4 2019 to reach 909.1M — making that the largest percentage increase among gaming sites. Hours streamed remained stable, closing the year at 12.3M. Unique channels increased 4.8% on a quarterly basis but declined 24.6% from Q1 2019.

YouTube Gaming Live’s biggest jump was in concurrent viewers, which grew by a sizable 33.8% in Q4 — making it the only platform to see an increase in average concurrent viewership in the quarter. Average viewers per channel also increased by 21% quarter-over-quarter — even though the number of unique streaming channels grew by 4.8%, which usually means a drop in average viewers per channel would occur.

YouTube Gaming Live closed the year with 22.1% market share.

Ninja’s move to Mixer has encouraged other streamers to start broadcasting on the platform, but despite that deal and the one with Shroud, the number of hours watched declined 8.5% quarter-over-quarter from 90.2 million in Q3 2019 to 82.5 million in Q4 2019. But year-over-year, Mixer’s hours watched have more than doubled.

Ninja and Shroud have helped to boost the number of hours streamed on Mixer, more than doubling the number of hours in Q3. But in Q4, the number of hours streamed dropped 12.9% from 32.6 million to 28.4 million.

However, 80.3 million hours of content was streamed in 2019 versus just 35.2 million hours in 2018.

There was also a 7.5% decrease in the number of Mixer channels in Q4 (3.9 million to 3.6 million), but a 78% increased in 2019 compared with 2018. Mixer now has triple the number of unique channels streaming, compared with YouTube Gaming Live.

Average concurrent viewership on Mixer declined 8% from Q3 to Q4, but was up 55.1% year-over-year. Average viewers per channel remained stable.

Mixer closed the year with a 2.7% market share.

The report doesn’t include Facebook Gaming live streaming data. But it does note there was a 400% increase in the number of live streams in 2019, from 504,173 live streams in Q1 to 2,525,863 in Q4, based on Facebook Gaming streamers who used the Streamlabs’ OBS product. Additionally, the number of total hours streamed increased by 275% from 438,835 in Q1 to 1,648,557 in Q4.

Also in Q4, several live streamers made the switch to Facebook, including Disguised Toast, as noted above, as well as Zero and Corinna Kopf. This could have also contributed to the momentum in the quarter, as well as launches of charity live streaming tools, and the arrival of the Facebook Gaming app in Thailand and Latin America.

For the year, the most-watched publisher was Riot Games, due to League of Legends and Teamfight Tactics. Epic Games (Fortnite) trailed by only 25.1 million hours. The latter saw a 29% decline, year-over-year, in terms of hours watched, while the former grew just 3.6%.

Similarly, League of Legends was the No. 1 game streamed on Twitch in 2019, followed by Fornite then Grand Theft Auto V. Fornite topped YouTube Gaming Live and Mixer.

While none of the streamers’ defections from Twitch have been significant enough to force the platform from its No. 1 position, it has created a healthier competitive landscape among streaming services. But in reality, it’s still too soon to see what long-term impacts the moves will have on Twitch and whether or not its rivals can continue their momentum in 2020.

YouTube launches Profile cards that show a user’s comment history

By Sarah Perez

Last September, YouTube began testing a new feature called profile cards, which showed a user’s public information and comment history on the current channel. The feature was touted as a way for creators to more easily identify their biggest fans by offering easy access to their past comments. Now, YouTube is launching the product to the general public, initially on Android.

YouTube hopes the new feature will help users “explore comments, build connections with others, and contribute to a more welcoming YouTube overall,” the company explains.

To use Profile cards, you’ll just tap on the profile picture of anyone who’s commenting to view their card. Here, information like their name, profile photo, subscriptions, subscriber counts, and recent comments will appear in a pop-up card. All this information is publicly available on YouTube, but the Profile card consolidates it in one place.

If you’re already subscribed to the commenter’s channel, the Profile card will indicate this; otherwise, you can click the red “Subscribe” link to start following the commenter on YouTube.

To be clear, the comment history that displays isn’t a user’s full YouTube comment history (though that would be interesting!). Instead, the Profile card only shows the comments on the channel you’re viewing when you click to view the card.

A link to the commenter’s channel is also included, towards the bottom.

While YouTube has promoted the feature as a way to connect with community members and identify a channel’s best commenters, it could also be useful for identifying trolls. Being able to see the commenter’s history on the channel can help creators or moderators make more informed decisions about whether future comments from the same users should be hidden, or if the user is trustworthy enough to earn a spot on the “approved users” list, for example.

When the feature launched into testing this fall, feedback was largely positive — especially since some see it as a way to help raise their own channel’s profile by being an active commenter. More recent feedback, however, has a few users asking for an opt-out option so their comments aren’t shown, citing concerns about out-of-context remarks or privacy issues.

YouTube says the feature is available now on Android and will launch on other devices in the future.

Profile cards are one of a few changes launching on YouTube. Also new are optional topics in the Subscriptions feed on iOS, which make it easier for subscribers to filter their subscriptions by topics like “Today,” “Unwatched,” “Live,” “Posts,” “Continue Watching,” and more.