The Confessional #12: C-Suite MCN Exec

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My latest interviewee for The Confessional is a C-Suite executive at a major MCN. He’s been in the space for quite a while now, and was an early employee at one of the major MCN’s in before climbing the ranks.

We covered a number of topics including:
– The early days of YouTube MCN’s and signing creators
– How the relationship with MCN’s and creators has evolved
– How Hollywood’s influence is killing creativity on YouTube
– How money and success has often had a negative impact on creators

The Confessional is a series of anonymous interview with influencers, brands, marketers, agencies and MCN executives to get honest, no-bullshit opinions on working in the space – the biggest gripes, the toughest lessons, the most valuable advice.

The following has been edited and condensed for clarity.

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What were the early days of MCN’s like when you were starting out?

Acquisition and signing was always my thing. But when I joined an MCN, there was really no book for it. We figured it all out by diving into the [Youtube] CMS.

We started scaling like crazy when we realized there was a very profitable segment of the business nobody was going after. There was this mid and long tail group of creators that were largely neglected – there was no clear pathway to monetization. It left us open to pick who we wanted and say: we want to work with you.

How have things at MCN’s changed?

After monetization opened up for everybody and our whole business shifted — we realized we had to start figuring out real value. At that time, it was all about digital growth. We were interested in social media economics, what makes a YouTuber grow, and a lot of it was education. We weren’t burdened by transactions.

Transactions make you a little dumb with digital. It’s a narrow focus: the brand is asking for this. You don’t really learn anything. But when all you have is, “I need to turn this person’s 10,000 subscribers into 500,000 subscribers,” — then every trick in the book that you learn, you’re going to a partner like, “Let’s try it.” It was a scrappy time, but I think there’s a need for it to come back. Transactional doesn’t grow you on that level — when it’s just money, it distracts and detracts from innovative growth.

What’s the focus for most creators today?

Most creators joining MCNs will say, “I just want sales deals,” when they have less than 100,000 subscribers. At that point you should be focused on digital growth, sales isn’t going to do much for you. You spend your time trying to figure out how to get that thousand-dollar deal or you spend your time growing, so you can have a ten-thousand-dollar deal.

Frankly, the best kind of development you can do is developing your own brand — that’s where the real money is. How do you have a fanbase that’s meaningful and will follow you, so you can move around? How do you build content that people care about? The smart creators are the ones that are able to develop their IP in such a way that it’s something that can extend beyond themselves.

What’s your perspective on the explosion of MCNs signing creators?

I can track it back to one YouTube launch of a feature in the CMS. Before, the way you invited channels was super manual. It was an incredible burden to get a single channel in and half the time they’d be rejected, for God-knows-what reason. In 2013 YouTube started the roll up tool, so you can invite dozens of channels at once. Things just exploded.

How did things evolve after that, with you and your competition?

It quickly became clear who was winning, and who the targets were. Every second that people on channel partnership teams were working meant big money. We knew the land grab was going to be over quickly. Creators started taking notice, and signing bonuses and minimum sales guarantees came into play. MCNs took deals they knew would lose money just to build their profile and value. In this second wave, MCNs became focused on revenue, not “This person’s cool, I want to work with him. Maybe he’ll be the next big star.”

The third wave of MCNs is when acquisitions started: Maker got bought for a billion dollars. You started juicing up your enterprise value to sell for as much as possible. Digital people got a crash course in the corporate world — it was an interesting time. We had already recognized the market opportunity, now we had to identify what the next evolution of MCNs would be.

What’s the thing you want people to be talking about, but they aren’t talking about?

The one thing that keeps me up at night is Hollywood influence coming into digital. It’s killing creativity on the platform — since it started, content has gotten worse. For creators who’ve gone to premium platforms, there’s this reaction from fans: “We liked you for what you were doing, why are you trying to do this other thing?” The idea of making fans pay for that, when the best version of you is free? When people talk about premium digital content, my stomach hurts.

The reason I started in digital is this: I believe in the democratization of media and in building an entertainment middle class. I hate gatekeepers, I like creators having control. People have the idea that if something has more money and people behind it, it’ll be better. I inherently disagree.

I’m interested in the weirdos creating stuff that revolutionizes audiovisual art and makes us think a different way, not the people who are playing the game, working the system, being super brand-friendly. It makes me sad that content is losing out in the algorithm. YouTube used to be for the outcasts, and I want it to be punk again.

What’s the next evolution of MCNs and creators?

There’s three different groups. First, the people building their own platforms, using the influence of their creators. Second, there’s some positioning themselves as digital marketing agencies with media sales, influencer stuff. They recognize that the most important value is in access to creators. And there’s MCNs building out other types of businesses—TV shows, movies, games—which they co-own with creators.

One type of MCN is not being addressed as much—this goes back to the idea of building the entertainment middle class—it’s the one reinforcing education on digital platforms. It’s finding new, interesting opportunities for YouTubers making $10,000 a year to go full time. Nobody’s focusing there, and there’s a lot of room for MCNs to fit into that market and add a lot of value. The original vision was figuring out how you grow talent in your network. Even though every major MCN has lost that vision, it’s still valid. I hope to see a lot more of it.

What’s your perception of creators these days?

I’ve worked with multimillionaires from YouTube, and they’ve earned every penny of it. To get that audience behind you is winning the lottery. When you post that first video, you don’t know if it’s going to get ten views or a million. Every time you do that, you buy a lottery ticket. But once Youtubers go from making nothing to making millions… once all the money’s at play, it adds a lot of pressure to something that was fun. Money doesn’t make people happier — fIfty percent of the time, I’d say it makes them sadder.

 
 
  • http://tipglo.com Justin A. Szlasa

    This is a fascinating read–truth and insight on how we got here and were we might be going. Nice work Brendan.