Why Twitter Is A Huge Threat To YouTube

Google ought to be very afraid of the threat Twitter presents to YouTube, I was told recently over lunch with James Borow, CEO of SHIFT, a social media marketing company. (SHIFT is one of Twitter's early advertising partners, and its clients include American Express, Toyota and Walmart.)

This didn't make much sense to me.

I pointed out to Borow that Twitter doesn't host its own videos, and that YouTube doesn't allow people to tweet.

Perhaps he was confused.

But then Borow made this argument:

People use Twitter as their default "public" identity, especially in the media. Athletes, celebrities, and news anchors all ask you to follow them on Twitter, not on YouTube. (You can follow them on Facebook too, of course, but the minimalist nature of Twitter seems to make it a less risky place for sharing.) If you're a fan of Kay Perry or CNBC's Melissa Lee, it's a lot easier to wait for them to tweet stuff at you than to follow them anywhere else - YouTube or CNBC - where you'd have to repeatedly check for new postings.

Currently, YouTube is benefiting from this arrangement, because media people host their videos on YouTube and then tweet the link on Twitter. The two brands are symbiotic.

But recently, Twitter began stealing short-form video content from YouTube in the form of Vine, with its 6-second blasts. (Instagram is another threat to YouTube, with its 15-second grabs). If you want to show people a very short video, then YouTube is no longer the easiest or most obvious place to put it.

For this reason, Borow believes Twitter will begin hosting its own videos, of all lengths, simply because following a person on Twitter creates a "channel" for new video. YouTube has tried to create popular video channels in the past, but they haven't really caught on. Most people discover video on YouTube from links or embeds elsewhere on the web, or through search. YouTube, right now, is like a back-end video-serving database for user-facing channels like Facebook and Twitter.

"Twitter will be the main host of video content in the future," Borow believes.

The other advantage Twitter has over YouTube is an "identity layer." Twitter users are logged in. Twitter and its advertisers know who you are, and how to target you with relevant ads. On your phone, the ID is even stronger because Twitter users are logged in permanently. And you're giving away your phone number. Sure, you could look at Twitter without being logged in, but it doesn't work as well. In fact, Twitter has a good business in non-logged in traffic. More people see Twitter content from the "outside" as monthly unique visitors in the U.S. (62.6 million) than there are U.S. monthly active users of Twitter (about 50 million).

YouTube is 90% functional without the need to login, even though Google is trying to encourage more logins. So the identity part of YouTube is much weaker than Twitter.

So Twitter has a triple advantage over YouTube when it comes to video:

1. It's better at organizing it into channels.
2. It's better at publicizing it to fans.
3. And it's better at identifying those fans to advertisers.

"YouTube will be very, very scared" the day Twitter announces it can host all types of video, Borow believes. It won't happen soon, he cautions. Video hosting requires a big buildout of new servers. It's not easy. "It's a huge infrastructure cost. But eventually they will," Borow believes.

Twitter will also need to improve its search function, which right now is terrible. Search on YouTube and Google for video is very high quality.

So YouTube has some time to deal with the threat. But if it doesn't, Twitter will be there, stealing YouTube's business out from under it. "They become really pretty amazing" with video, Borow says.