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Defining the future of tech and entertainment with Janko Roettgers.
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Google is testing digital merch sales for YouTubers

Google is testing digital merch sales for YouTubers

Good morning, and welcome to Protocol Next Up. This week: Google has been quietly testing a new monetization tool for YouTubers, and Amazon's MGM deal is a big boost to IMDb TV.

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The Big Story

Google's Area 120 tests Qaya, a digital merch platform

Google's R&D unit, Area 120, has been quietly testing digital merchandise sales for YouTube content creators. The test is not integrated into YouTube's website or apps, but instead is being facilitated on a separate platform called Qaya.

Some of the creators participating in the test include musician Renae, Chef T from Simpleeats.com, NYC vlogger Alexis Barber and aerialist Aaron Koz. That selection seems to suggest that Qaya is an early test: None of these creators has particularly large YouTube followings, and Barber actually works for YouTube.

The Qaya team didn't even bother to properly integrate with Google's own payment services, and instead opted to use Stripe as its payment processor.

  • Content offered via Qaya includes PDFs, videos, MP3s and personalized reports, with prices ranging anywhere from $3 to $149. The platform is telling users that it is taking a cut for "technology & transaction fees," but is not detailing how much that is.
  • Quaya currently hostes simple catalog pages for each creator, and offers buyers an option to access their past purchases. Content discovery is planned, but not yet implemented.
  • Google didn't immediately respond to a request for comment.

Area 120 has been positioned as an in-house incubator for the passion projects of Google employees. "At Area 120, we work on 20% projects 100% of the time," as the unit's website puts it. Some of Area 120's projects include Byteboard, a service meant to make coding job interviews more inclusive, and Kormo, a jobs search app for the Indian market.

  • Area 120 also previously experimented with providing additional revenue opportunities to creators: Fundo, a platform for paid virtual events, began working with select YouTubers in 2019. Google officially announced Fundo last September, but the platform has since shut down.
  • Ironically, paid virtual events have gained a lot of traction since: Discord announced ticketed events earlier this month, and Twitter has plans to offer paid events on its live audio platform Spaces soon.

YouTube itself has also launched a number of monetization features for creators in the past, including merchandise sales through approved ecommerce partners, paid channel memberships and so-called super chats. And Patreon has long offered creators not happy with YouTube's ad-heavy monetization paid memberships as an alternative. Qaya could in theory become one more arrow in YouTube's quiver to keep creators on its platform.

Overheard

"At least we now know what the Apple AR glasses will not look like!" — Blogger Adam Miarka, responding to Snap's first set of AR Spectacles.

"Amazon buying MGM is another milestone for tech and the rest of the world converging. The distinction between tech and non-tech is evaporating, and we're only going to see more of this in all industries."Box CEO Aaron Levie.

A MESSAGE FROM AMAZON

A recent report studying voluntary increases to wages by businesses found that when Amazon raised its pay to $15 in 2018, it led to a 4.7% increase in wages for employees at other companies in the same market. The study also found no significant job losses in the community after the wage increase.

Read more

Watch Out

Amazon's MGM acquisition: Don't forget about IMDb TV

Amazon's $8.45 billion purchase of MGM doesn't just benefit Prime Video, and by proxy everything else that Prime members are spending money on. It's also a big boost to Amazon's advertising business, including its free, ad-supported IMDb TV video service.

IMDb TV has long flown under the radar. Launched in 2019 under the name Freedive, the service has seen some significant growth in recent months. Amazon has yet to release absolute viewer numbers for the service, but the company did reveal this month that IMDb TV's viewership increased 138% year-over-year.

  • During Amazon's first Newfronts presentation, the company also said that IMDb TV viewers spend an average of 5.5 hours with the service every week.
  • Amazon wants to keep growing that number by making IMDb TV more widely available. Earlier this year, the company launched an app on Google's Chromecast with Google TV streaming device. In the coming months, it plans to unveil standalone apps for iOS and Android.
  • Amazon has started to invest some real money into IMDb TV content, including a spin-off of the Prime original "Bosch," a Judge Judy reality TV show, a revival of "Leverage" and a bunch of other scripted and unscripted shows. IMDb TV's catalog also includes audience hits like "Mad Men," "Lost" and "Schitt's Creek."

Figuring out Amazon's motivation behind IMDb TV has been a bit of a challenge, just like many of the company's media plays. Is it a defensive play against free video services like Pluto, Tubi and the Roku Channel? Or is it a way for Amazon to build another funnel for its Prime subscription business by luring people in with free stuff, only to then up-sell them on Prime Video?

It's increasingly becoming clear that IMDb TV is more than that. It's part of a massive advertising business that Amazon has been building in plain sight:

  • Amazon reported around $21.5 billion in "other" revenues, the majority of which comes from advertising, last year. Those ad dollars come from sponsored product listings on Amazon.com, audio ads playing on Echo speakers and video advertising, among other things.
  • During the Newfronts, Amazon revealed that its OTT video advertising business now reaches over 120 million monthly active viewers. This includes IMDb TV, ads that Amazon runs in third-party streaming apps on Fire TV, as well as on Twitch.
  • Loop Capital recently estimated that Amazon is making more than twice as much money with ads as Twitter, Snap, Roku and Pinterest combined.

In this context, MGM isn't just about Amazon competing with Netflix and Disney+. We should expect a good chunk of its catalog of 4,000 movies and 17,000 TV show episodes to find their way to IMDb TV eventually, and the studio will also help Amazon create new originals for the ad-supported service. This, in turn, will make the service more attractive to advertisers who have increasingly been following audiences away from linear television, and could shift billions of additional ad dollars to streaming in the coming years.

A version of this story first appeared on Protocol.com.

Fast Forward

  • On Protocol: Roku wants to expand into smart home devices. The company has been staffing up to build a smart home product roadmap, and strike alliances with IoT device makers.
  • Disney wants to close 100 TV channels worldwide this year. Responding to a shift to streaming, the company already closed 30 channels last year.
  • "Boss Baby 2" gets day-and-date release. The film will debut on NBCUniversal's Peacock streaming service the same day as in theaters.
  • On Protocol: Struum is building a bundle for the streaming era. Struum co-founder and CEO Lauren DeVillier explains why bundles may be the future for niche streaming services.
  • Consumers bought 50 million new TVs in Q1. And guess what: Most of those new TV sets have streaming apps built-in.
  • Sonos details earbuds in new patent filing. Previous filings have hinted at plans for over-ear headphones, but these ones are supposed to have detachable battery plates.
  • Internet TV bundles are feeling the pain. The top internet TV services lost 1.6 million subscribers in Q1 2021, according to a new estimate.
  • Snap bought AR waveguide maker WaveOptics for $500 million. Snap's new AR Spectacles already use the company's display technology.

Auf Wiedersehen

Ever looked at the long list of connected devices in your router's mobile app, and wondered: What do my Roku, Echo and Sonos actually do all day? Technology artist Nicole He and animator Eran Hilleli had the same question, which is why they built Invisible Roommates, an AR experience for Ikea's "Everyday Experiments" series. Invisible Roomates turns connected objects into animated characters that shoot paper airplanes at each other every time the real devices exchange data. "We wanted to reflect the ambiguity around data by presenting the devices in a way that mirrors the joy we can get from them, but also reveals some of the invisible things that go on with and between them in real time," Hirelli said. Ikea has been doing these kinds of experiments in partnership with Space10 for a few years now, and the latest batch is all about privacy and trust. Now we just need a router maker to take some inspiration from this …

Thanks for reading — see you next week!

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