YouTube Set To Lose Significant Movie Ad Revenue

Given the slate of movies Disney has scheduled for release in 2019 it can’t be good news for YouTube and parent Alphabet that the entertainment company is reportedly pulling its advertising from the streaming platform in the wake of revelations of how often comments are used to highlight sexually exploitative material.

Movie ads are commonly seen on YouTube as pre-roll spots, and sponsored placements often contain prompts to watch new trailers for upcoming movies. Disney pulling their advertising spending from the platform means YouTube will not be used as part of the paid marketing for movies including:

  • Captain Marvel
  • Dumbo
  • Avengers: Endgame
  • Aladdin
  • Toy Story 4
  • Spider-Man: Far From Home
  • The Lion King
  • Artemis Fowl
  • Frozen 2
  • Star Wars: Episode IX

In 2018, Disney commanded 26.1 percent of overall U.S. box-office revenue, bringing in over $7 billion. The studio released the top three films of last year, including the top performing Black Panther, and its dominance is expected to become more substantial as it finalizes its acquisition of Fox.

Basically this is not who you want to have on your bad side if you are a platform or other outlet that’s reliant on movie marketing and other advertising income.

What Disney and others, including the maker of the Fortnite video game, are doing is deciding that YouTube-hosted content is no longer a safe space for their brand. They’ve determined that they risk substantial reputational damage that could potentially translate into lost revenue because they’re seen as supporting material that’s not just offensive but harmful and reprehensible.

That’s the last thing Disney wants to have happen. Look at all those movies listed above. They are all family-friendly franchise installments or starters that are designed to not just generate ticket sales but also theme park attractions, consumer merchandise and additional revenue streams both today and, through sequels, for years to come. Each is sure to be accompanied by massive ad campaigns in addition to the publicity tours and earned media efforts, and YouTube was positioned to receive a good chunk of that spending.

This is far from the first time YouTube has faced this kind of decision from advertisers. AT&T just recently returned ads to the site after pulling them two years prior for similar concerns only to reverse that decision in the wake of this latest controversy. Other companies have, at various times, removed their advertising and marketing from other sites, platforms and networks.

Yet where the line is between “acceptable” and “too far” remains mysteriously vague and uncertain. Facebook is currently under fire for its role in helping to spread harmful anti-vaccination conspiracy theories. Anti-Semitism is rampant on Instagram. Criticisms of how Twitter fails to protect women and minorities from harassment of all kinds are almost as old as the site itself. There don’t, though, seem to be any concerns over promoted posts and other ads being placed on those social networks, indicating the problem isn’t specific or substantial enough to warrant such measures.

In the last 10 years or so, Hollywood studios have increasingly worked to balance their roles as creative storytellers and brand managers. Disney is the best example of that new reality, releasing almost nothing that isn’t a remake, sequel, adaptation or spinoff. It can’t afford to be seen as endorsing, through advertising, those engaging in the sexual abuse or exploitation of children because doing so would harm not just the corporate brand but all the IP the company oversees. There’s simply too much at stake.

Yet the problems of offensive material go far beyond one platform or network. As has been the case since the first Google AdWords were placed in the right rail of a blog, advertisers can’t always guarantee their messages will appear alongside wholesome, brand-friendly content, but the reach of consumer-generated media is too enticing for most to pass up.

Right now corporate boycotts and ad blackouts are relatively isolated incidents. The platforms impacted by these actions as well as user backlash usually follow a script of pledging to do better followed by the CEO or other executive giving multiple interviews where they talk about how much they’ve learned from the episode. The cycle then repeats in four to seven months when the next outrage or crisis breaks. Indeed it seems YouTube isn’t doing anything substantively different in the wake of the most recent crisis, just offering explanations of existing policy to make sure creators and publishers understand when they might be penalized.

YouTube, like the other social networks, won’t react until they feel a threat to their income has been presented. On that front Disney has a lot of leverage, even just counting its movie advertising budget outside of everything else the massive company promotes on a regular basis. It simply can’t risk the damage that could be done to entertainment franchises that are designed for decades of profitability, at least not at the moment. My hunch, though, is that we’ll be having this same conversation sooner rather than later.

Author: Chris Thilk

Chris Thilk is a freelance writer and content strategist with over 15 years of experience in online strategy and content marketing. He lives in the Chicago suburbs.

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