Some of the major points we covered were:

• Subscription video on demand (SVOD) and YouTube competitors
• YouTubers “making it” on television
• YouTuber revenue streams
• How much money his top creators are making in a year
• How creators can better work with brands, and vice versa

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.

You’ve been on YouTube for a very long time. How did you first get started?

I got started back in 2009, and I got started because I actually went to high school with another YouTuber. He’s still got pretty large following to this day.

I saw what he was doing and how we was building a community around himself. It seemed like a huge opportunity. So I started working with him a bit, and I was introduced to other creators and collaborate with them. I was able to turn YouTube into a career in about three months.

How has the community evolved since those early days?

What was really interesting about the early days is that once you hit a certain number of subscribers you were immediately part of the community. People had a sense of respect for you and vice versa. Once you hit that level, you could really approach just about anyone and do collaborations, or just strike up conversations and friendships.

As this community of a few thousand people exploded into the millions of creators you now have today, a bunch of micro-communities developed. Now, it’s like everybody sticks to their own clique. It’s almost like high school. So if you’re a beauty guru, you collaborate with other beauty gurus and you don’t really step outside that.

There’s just not as much cross-pollination as there once was.

I think a lot of the playfulness has disappeared as well. Now, we jump onto each new platform – push our audiences to them (the platforms), and then immediately we ask, “How do we monetize this?”

Speaking of fans, you’ve got a sizable following. What’s it like having fans?

It’s actually really interesting. I rarely use the word “fans,” I’ve allowed myself to use it as of late. This is something that I and a lot of my other YouTube friends struggle with.

We want to be humble, but also want to be respected in the same way that Hollywood celebrities are respected and perceived.  

Do you want to be put on the same pedestal as “traditional” celebrities?

Being labeled as a “celebrity” pigeonholes YouTubers because you can be recognizable without being a “celebrity.” I think it goes beyond celebrity. I think it’s about being a public figure.

There’s a new generation of influence sprouting up as a result of social media. You have people that may be an entertainer-creator or maybe they’re a body-positive influencer. There’s people with influence across spheres — politics, entertainment — you can be an influencer around anything now.

Whatever name we end up giving this new type of public figure, I think they are definitely going to be held to a higher esteem and value than they are today.

How has the perception and attitude towards YouTubers changed among brands and agencies?

The marketers have done a lot to catch up these last few years and they value what we do a lot more.

They’re beginning to recognize that we influencers are not a simple plug-and-play, where they can just say “Let’s put our bag of chips in this,” or “Let’s give them a bottle of water.”

They’re starting to take a step back and invite us in as collaborators. They’re asking what excites us and what ideas we have. It’s becoming a bit more of a conversation than it used to be.

Also, it’s interesting — as demand has increased, you see influencers being represented by four or five different managers and talent agencies. You don’t quite see that in the traditional talent world.

The fact that an influencer can be so freely represented and not be limited to one representative shows me that in some ways the influencer has more negotiating power than traditional celebrities.

I hear from a lot of the creators that “brands don’t get it.” To your point, and in my own experience, it seems as though brands are “getting it” more and more. Do you feel like creators are doing more to adapt and empathize with the brand’s perspective?

Yes and no. You and I have known each other over the years, we’ve seen people come and go.

For the most part, the ones that we’ve seen go are the ones that didn’t develop much business etiquette, or, even just the willingness to put aside some of their stubbornness to be open to some of those brand conversations and feedback.

The ones that have stayed around have been able to have conversations. They don’t just say no to an idea, they offer up solutions.

You have to be able to adapt and work towards a solution where everyone is happy with what they’re getting. It’s only a success if the creator is happy, the audience is happy, AND the brand is happy.

Some creators not willing to put forth the effort, and aren’t open to ideas or build off of ideas that are not their own.

Are you still with an MCN or are you independent?

All my channels are within different MCNs.

The deals I’ve structured are different than what most creators get. They’re in my favor more so than most of the contracts that these MCNs have with the 40,000 other people who signed with them.

What advice would you give to an up and coming creator? What kind of things would you advise them to keep an eye out for?

The first thing to keep in mind is that you’ve got a lot more negotiating power and leverage than you think.

In some cases I get 100% of my revenue. Oftentimes the MCNs will try to offer a revenue split over a certain amount of views. They say, “Hey, look, we did our math and over the last 12 months you averaged out this amount of views. We’ll do a rev-share split of this amount of views over your average amount of views.”

I say no to that because the last 12 months doesn’t mean anything to me. The last three months are going to be the most important numbers to me. And when you go down that math, you’re not going to come to an agreement.

I would also say if you’re going in with an MCN or any other company, you should do it with the idea of getting them to invest in you and your content (whether with upfronts or production support). By having them support you in creating more content, they’ll be invested in your success.

Also, limit your deal to no more than a year in length. Lastly, make sure you’re not just joining

for brand deals. Brand deals are great but you can get multiple managers and agents to represent you to get you those deals.

Where do you see the future of YouTube going? How do you juggle all these different platforms, and does YouTube have staying power?

I feel that YouTube is going to have staying power because of its massive library of content.

Facebook doesn’t have that much content, and I’m not sure if they are ever going to have it.

I think Facebook is similar to what YouTube was back in 2005-2009 — there are a lot more amateur videos and far fewer professional creator videos. YouTube on the other hand has really matured, and is closer to Netflix in the sense that the content has really developed and become more professional.

I feel that YouTube Red is a step in the right direction. And honestly, I think video platforms are going to evolve across the board between Twitter and Snapchat and everything else. We’re going to see different platforms cater to different types of content. I may go to Facebook one day to find a new viral video, but I’ll got to YouTube Red to watch something from a premier independent creator.

How do you as a content creator juggle all of these new platforms? How do you decide where to invest your time and develop an audience?  

It’s actually really natural.

I produce my content with the idea of being able to repurpose it for different platforms. So if it goes up on YouTube, it’s going to go up on Facebook. If it’s going to go up on Instagram it can go up on Vine.

Getting that content distributed across each platform isn’t really hard. I play around with each for a bit and figure out what works.

I took a great deal of interest in Facebook over a year ago and I played around with my content there and it did pretty well. Now I’m playing around with Instagram and it’s doing well there too.

I think people are thinking of their audience as being on every platform. The reality is that if it’s on YouTube, put it up on Facebook too. Put it up on Instagram. Put it up on everything you can. Do a quick edit and cut it down a little bit. Do whatever it takes. The amount of time that you’re going to put into repurposing and customizing content for each platform is going to show a return.

What’s the formula for success on YouTube? What does it take to build a successful channel?

It’s a combination of having fun and being logical. Everything I’ve ever done had to excite me and that doesn’t necessarily mean I didn’t get frustrated with it or I wanted to not do it at some point. You’re going to have speed bumps. But I was very excited to start. Very inspired. And I was very logical. I asked myself, “Okay, how much time am I putting into this? How much money am I putting into this? If this was money, how much money is this of my time? And how quick of a return can I get off of this?”

So when you go from being a personality on camera to investing into content and putting a team behind it, the decisions you make are all about ROI.

So I would say, if you want to be successful, do what you love but put some logic behind it. Put some business sense behind it.

Anything else to add?

The one thing that I will say that I’ve noticed over the years within this industry is that publicly we all say, “Yeah, everything’s all great and dandy.” But, privately you turn to your friend and you’re like, “F this. This does not make sense. This is so stupid. This is terrible. This is horrible.”

We’re all having these private conversations with each other, but we’re afraid to have them openly because we think we’re going to make people feel bad or it’s going to turn into some sort of World War III.

 We covered a number of topics including:

• How Youtube’s relationship with creators has evolved
• The massive growth of the YouTube partner program
• YouTube’s relationship with MCN’s

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.

———

A lot of people are confused about how hands-on YouTube does and does not want to be with creators. How hands on are they?

There were three critical moments in YouTube’s approach to creator relationships. Pre-2010, there weren’t too many interactions with creators.

2012 was a pivotal time. It’s when brands started to seriously invest into digital media, MCNs started to gain legitimacy, and YouTube made a million different bets and hundreds of millions of dollars. It was like, “We want to enable these YouTube-enabled businesses, we are fine with people intermediating.”

2014 and 2015 was the most material shift, where YouTube was like: “Holy shit, we are losing the thing that made us special and we will put humans as well as dollars behind getting that relationship back.”

So that’s where they are now. YouTube is on the defensive because a) they’re saying that because of MCNs, agents and managers have been further intermediated, and b) they’re nervous because of competing platforms like Facebook Video.

Going to the MCNs, what sparked you guys jumping in to address the affiliate and the managed?

The origin of direct and manage came from naturally the evolution of the MCNs.

MCNs were born out of feature arbitration. The partner program was important at the time because not only could you monetize, but you would also agree on certain features like custom thumbnails and custom banners. In the early days if you weren’t one of the YouTubers hand selected by YouTube to be a part of the partner program then you had to join MCNs to get these things.

This is the house that divided YouTube, where half of us were pro-creator. The other half was like: “No, we actually need to enable these MCNs to continue to thrive.” But if you look at the numbers it wouldn’t have mattered. Maker Studios would love to believe that they hold 10 percent of traffic for YouTube globally. They don’t, it’s less than two percent. If they left, they wouldn’t do shit.

Was there pressure within YouTube to kind of prop up the MCNs to a certain extent?

In a way. We got rid of their ability to feature arbitrage and were forced to create real value-added services. This is when you start to see them invest in real sales team, production houses and so forth. It’s because we forced their hand. Because we took their dependency on shit they should have never depended on.

Do you think they’ve done enough to provide value to creators?

It depends. For the larger ones that are highly scaled, do they provide the value they should? No. They never have. Talk to any creator and you will get that response.

My thoughts on MCNs are generally negative. It’s a questionable value they provide across the board, certainly on ongoing basis. In my opinion, all of them were saved by the big media companies who needed a digital play and just don’t understand shit. But, am I happy, in hindsight, that they did exist in some fashion and that we are validated…yeah. It was worth it. But do I think they are useful, in reality? No.

Could you talk at all about the growth of the partner program?

Initially the partner program was small – an ever growing group of hand selected creators. In 2011, we took it from 33 thousand people to 4 million. Now, when you fast forward to today, the partner program doesn’t really exist. And that’s by design. We made a super-conscious decision to move away from the notion of partner because it was brand inconsistent with YouTube, and we didn’t philosophically like the idea of a non-democratic platform.

We wanted to enable anyone to turn creativity into a career. And what that practically meant is anyone can use certain features and programs, anyone can have a deep relationship with YouTube, depending on performance. It wasn’t demarcated by the relationship you have with your MCN or otherwise.

We did this to scale monetization and as a result brought in 50 percent more revenue. Even though most of the channels we enabled monetization for were tiny, it mattered because of how big the platform is.

When YouTube opened up the partner program to the masses did CPM’s lower?

The CPM’s did start lowering. However, around that time another factor came into the picture that had a way bigger impact on the creator’s bottom lines.

In 2012 we launched Watch Time as guiding algorithm of YouTube. As a result, a lot of people who did click-baity stuff suffered. I remember overnight a lot of channels lost 50% of their viewership.

What was the impact of the Partner Program to YouTube’s bottom line?

By opening up monetization to more and more people YouTube has generated billions in revenue. In 2011, after we began scaling the partner program, we grew revenue 50%. This was in spite of the fact that most of the channels we enabled monetization for were tiny. That’s how big the platform was (and is today).

The addition of monetization of more of the long-tail helped us generate $400 million dollars, which that year, in 2011, was a third of all of YouTube’s revenue.

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 can negatively 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.

———-
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.