UPDATED 08:17 EDT / DECEMBER 09 2014

Google afraid biggest YouTube stars will get poached by Facebook or Vessel

youtube-logoYouTube has started offering bonuses to some of its biggest stars, ahead of new competition from Facebook Inc. and other video services like Vessel.

The Google-owned YouTube basically invented the idea of user-generated streaming video, and even after 10 years it is still going strong with over 1 billion unique visitors each month. But the king of internet video is starting to see its fair share of competition on the horizon, seemingly making Google more than a little nervous.

According to the Wall Street Journal (WSJ), sources say that popular YouTube stars are being directly targeted by both Facebook and Vessel, an upcoming premium video service created by former Hulu CEO Jason Kilar. Both companies are offering video producers incentives to switch to their service.

“I would like to remain on YouTube,” said one source. “But some of the competing offers are incredibly attractive.”

In response, Google is reportedly offering bonuses to its YouTube celebrities to keep them on the video streaming site.  While the videos of an average YouTube user see only a handful of views, the videos created by “YouTube celebrities” drive a huge chunk of the site’s traffic.

 

The competition

 

Facebook has been stepping up its focus on video over the last few months, and enticing YouTube stars is just one more way for the company to capitalize on streaming video. During Facebook’s “Q&A with Mark” community town hall meeting, CEO Mark Zuckerberg claimed that most of Facebook would be video within five years.

Facebook has also been upping its game with sponsored video ads, which is what makes up the majority of YouTube’s revenue.

Vessel, a newcomer on the scene, also plans on edging into YouTube’s territory, which according the the WSJ’s source is particularly worrying to Google. The site will be a premium subscription service that offers the short-form style of videos for which YouTube stars are known in a more curated, early-access environment.

Vessel has raised $75 million in venture capital, some of which it intends to use to sign big name internet celebrities to drive content in the early days of the site.


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