First reported by The Information, the YouTube version of TikTok has been dubbed ‘Shorts’. The TikTok competitor is rumored to live within the existing YouTube app and take advantage of YouTube’s music licensing deals.

This doesn’t come as a total shock. YouTube has been quietly incorporating TikTok style features for some time now. Over the last month or so YouTube’s app has changed features that mirror TikTok in three big ways:

1) Emphasizing categories vs search
2) Curating content experiences
3) Providing content prompts

CATEGORIES VS SEARCH

Last week I wrote about how YouTube shifted its emphasis from search to more curated experiences (like TikTok) and was bracketing content categories in a manner very similar to hashtag challenges.

Historically, YouTube placed an emphasis on search (it being the second largest search engine). Recently the search feature was changed to ‘explore’. Now when you click on ‘explore’, there are categories of content featured that site above recommended and trending videos. Previously the app had trending and recommended content. This mimics TikTok’s has ‘discover’ feature.

At the top of TikTok’s discover page is curated content categories, hashtag challenges, and list of trending hashtags. 

YouTube is evolving from specific video recommendations to an emphasis on broader categories. 

CURATED CONTENT

When you click on a content category there’s a header and  curated list of videos to watch. This is layout is similar TikTok.

On TikTok if you click through to one of the content categories or hashtag challenge there’s a banner across the top, description of the content and then a curated list of TikTok’s to watch.

PROMPTING CONTENT CREATION

YouTube seems to be taking cues from TikTok’s hashtag challenges. TikTok’s hashtag challenges act as prompts for users to create content. Creators often jump on the challenges in hopes of being featured high up on the challenge pages and getting exposure.

YouTube has begun experimenting with its own hashtag challenges.
Due to Coronavirus millions have been forced to stay home. YouTube helped get the word out by launching the Stay Home #withme challenge. The Stay home #withme challenge invited creators to make videos around activities anyone could do from home. 

YouTube consolidated all #withme videos under the hashtag (much in the same way TikTok does). YouTube doesn’t typically create or promote specific content asks from its community. In making this change YouTube mirrored hashtag challenges.

These are big shifts for YouTube.

Search has been such a big part of the site, that playing a larger role in promoting ’discovery’ seems as though the platform is looking to modify behavior in a significant way. Additionally, YouTube has historically been passive in content creation. With the launch of #withme YouTube clearly provided a prompt for the broader community.

These changes, which are influenced by TikTok, are likely providing data to YouTube to inform their ‘Shorts’ launch.

Brat creates original scripted programming catering to teenage girls. The company has shown explosive growth – in just over a year they’ve generated over 22 million views and three million subscribers. Brat has grown, at least in part, due to its regularly featuring popular influencers such as Anna Cathcart, Addison Riecke, Francesca Capaldi, and Emily Skinner.

What I find really interesting about Brat is their approach to working with influencers – they incorporate influencers to build audiences, but their IP doesn’t live or die based on any individual talent.  Instead, Brat has modeled itself after the Marvel Cinematic Universe where all characters and shows exist in a single universe of the same (fictional) county.

Brat gets to capitalize on influencer audiences – essentially building a market into the content/product itself. Most influencer content is lo-fi (when compared to traditional TV and films), as a result Brat is able to create more ‘native’ looking/lower cost content, which costs less. Rob Fishman, co-founder of Brat, said that they’re keeping costs very low/that they’re “spending in the hundreds of thousands of dollars for every season.” This budget conscious production is necessary given the YouTube environment where CPM’s are low (and at times disappear entirely).

In looking at Brat I see a lot of parallels to AwesomenessTV – they both cater to a younger, female demo, and produce content featuring influencers. Where they seem to differ is Brat is operating more lean and mean, and has a more straightforward path to becoming a profitable business.

In Digiday, Brat Co-Founder, Fishman stated that “If you’re spending any meaningful amount of money on production, there’s not yet a business model that’s totally supported by the platforms,” I agree with that. Ad revenue on YouTube isn’t as reliable as it used to be and even with ad integrations and sponsorships the ad model is very difficult.

That said, Brat is building massive audiences with their content, and doesn’t have to wait for advertisers to generate revenue. They’re vertically integrated, and are building up their own brand and selling their own products. If you visit the Brat website you’ll be able to by Brat branded merch, makeup, and jewelry. In looking at their site it looks as though their products must be selling well – several items are sold out.

Brat also seems to be laser focused on developing their own IP – I think that’s going to help them stay focused and not overextend themselves. Furthermore, it will allow them to be less solely reliant upon specific talent. Brat isn’t reliant upon one influencer to make or break their business. Now that they’ve created this brand and this audience they can test different stories and talent without it all hinging upon big influencers to make it a success.

It will be interesting to see how the company evolves and what role advertisers play in their business. At a glance, I certainly see more of an opportunity in selling products, paid subscriptions, and being more reliant upon their own IP vs outside advertisers.

The tenth, US based Vidcon, has come to its conclusion.

The conference has grown dramatically, from its humble beginnings – a few hundred people in LA – to tens of thousands of attendees filling the Anaheim Convention Center.

I’ve been to every Vidcon that’s been hosted in the US and its crazy to look back and see how much it has grown.  Brands now flock to Vidcon, and whole industries have been built upon the influencer economy.

This year I identified five overarching trends that really dominated Vidcon.

#1 CHINA, CHINA, CHINA

It’s been just under a year since China based ByteDance rebranded Musical.ly as TikTok, and in that short period of time they turned the platform into the most buzzed about social network.

While most big YouTubers were hidden away from throngs of fans at Vidcon, only coming out for meetups and panels, TikTokers were everywhere doing collaborations, and generally making their presence felt. It didn’t hurt that the platform also hosted the biggest bash of the event with a live performances from 2Chainz

TikTok wasn’t the only Chinese based platform with a presence at Vidcon. Haohao Xu, the Sr Director of Tencent hosted a fireside chat where he discussed Tencent’s push beyond China.

Seunghae Ahn, Product General Manager at Baidu also did a talk and highlighted Baidu’s video capabilities, and robust influencer ecosystem. The key takeaway being, that Chinese creators are expanding beyond their native platforms into YouTube (and beyond) and that there’s a massive MCN industry developing to help non-Chinese based creators develop audiences on Baidu properties.

#2 DIVERSIFYING REVENUE STREAMS

One of the hottest topics at Vidcon this year was how influencers can monetize their audiences beyond relying solely upon ad dollars.

For context, over the last few years the major platforms (YouTube, Facebook, etc) have applied more stringent rules for what content can and cannot be monetized, and CPM’s for most creators have declined. As a result, a whole ecosystem has emerged to help creators diversify revenue streams so that they’re not solely reliant upon advertising dollars.

At Vidcon, YouTube’s Chief Product Officer, Neal Mohan announced the launch of ‘Super Stickers’ which fans can purchase and deliver to their favorite creators (at a price), of which the creators get a significant percentage. They also announced additional tiers to their Channel Membership program, which acts similarly to Twitch’s subscription features and offeres varying degrees of exclusive content in exchange.

Just ahead of Vidcon, Facebook hosted a number of creators up in Malibu and announced a number of similar updates.

Facebook announced that Stars, a tipping feature currently being used exclusively in gaming streams, is going to be rolled out beyond gamers as part of an expanded beta to a small group of video creators. Additionally, Facebook like YouTube is going to begin testing, paid subscription features.

#3 WHERE WERE THE MCN’S?

One of the most noteworthy trends was a lack of (most) MCN presence.

First and foremost it is worth noting the exceptions – Collab, AwesomenessTV and Studio71 all had their presence felt. Studio71 hosted their annual bash, always the best party at Vidcon. Collab had an exclusive lounge and parties as well, and AwesomenessTV was plastered across Vidcon with advertising and booths.

However, in years past MCN’s dominated the conversation at Vidcon. They were a hot topic at most panels and keynotes, and for years were amongst the biggest sponsors. A lot has changed – Maker studios is non-existent, having been purchased and then shuttered by Disney, both Machinima and Stylehaul shut down. Countless other MCN’s have quietly shut down or are puttering along, but without the fanfare they once had.

The only reference to MCN’s that I noticed at any of the panels and talks I attended was in Baidu’s presentation in reference to the development of a Chinese MCN ecosystem.

There were rumblings of MCN’s having side meetings with YouTube about the fact that they feel as though they no longer feel supported by the platform.  Beyond that MCN’s were hardly mentioned and there were no panels or keynotes where they were the primary topic of conversation.

#4 VOLUME OF PLATFORMS

At the first Vidcon, 10 years ago, YouTube was the only viable social video platform. There was no Instagram, Facebook hadn’t launched video, and Vimeo, Dailymotion, etc were already left in the dust by YouTube’s sheer scale.

Fast-forward 10 years and there are over a half dozen major players in the social video space each vying for the attention of creators. Linkedin now has video, there’s YouNow and Twitch pushing to dominate livestreaming, Snap, Instagram, and TikTok are battling each other over short form content, and IGTV and Facebook Watch are making real attempts at chipping away at YouTube’s scale. Even Pinterest has a video offering it was touting to advertisers.

#5 DAMAGE CONTROL

Social media platforms have had a rough couple of years; at Vidcon it was clear YouTube wanted to take the opportunity to spruce up their image.

YouTube emphasized all the good they’re doing. During their keynote Neal Mohan, Chief Product Officer at YouTube went out of his way to highlight how diverse the platform is, and how they’re going to invest in education.  Hardly a word was mentioned about the recent controversies they’ve been embroiled in regarding censorship, de-platforming, radicalization, and demonetization. Other than a brief reference to updates to their terms of service coming out within the next six months you’d think everything was humming along smoothly.

I admire all the good that YouTube has done but the YouTube presentation felt like an attempt to white wash there image in front of an industry audience instead of addressing the real issues they’ve been facing over the last several years.

Regardless, as in years past Vidcon was a great way to get insight into what’s changing within the industry as well as connect with creators and other companies within the ecosystem. I’m also still shocked at how few brands and agencies invest in having a presence. Ten years in, I’d argue that Vidcon is the best, and most undervalued way to tap into the biggest influencers on the planet.

Where did things go wrong?

The role of MCN’s within the YouTube ecosystem has diminished, and many of them have disappeared altogether. Maker Studios, which was acquired by Disney for nearly a billion dollars has been shuttered. AwesomenessTV was sold for a fraction of its peak valuation and far less than the amount of money they raised.

While I’m not privy to the specifics of what happened at Defy, there are a few key factors that I think have contributed to MCN’s diminished role today.

LACK OF COMPETITIVE MOAT

MCN’s didn’t really have a huge competitive moat. At the end of the day MCN’s are basically ad networks rolled up into a central CMS. This allows the MCN’s to sell ads directly across channels. The issue here is that you can buy ads direct from YouTube in upfronts, and/or on auction. So, what’s the incentive to buy from a third party when you can go straight to the source for the same inventory? The reality is few MCN’s were able to sell their ad inventory to brands directly.

In a previous blog post, one talent manager was candid in saying that MCN’s didn’t really sell much ad inventory directly.

They rarely sell media, and there’s really no reason for a buyer to buy media from an MCN. Why should they when they can buy from Google directly. 

I feel like the MCNs are delivering value to a very, very small number of people in their network. And it doesn’t justify their business model. It would be a lot more honest if MCNs just called themselves what they were, which is a sales agency. The fact that MCNs have contracts that auto-renew without notifying the creative party is an indication of their awareness that they’re not delivering on their promise to creators.

In addition to selling ad inventory across channels most MCN’s also sold brand integrations within influencer content. The challenge here is that, for the most part, talent wasn’t exclusive to MCN’s on the branded content side of the business. Most top tier YouTube talent had managers, agents, and/or were signed with agencies (ie WME, UTA, or CAA) and countless others managed deals themselves.

OVERHEAD

A lot of MCN’s raised a lot of money. Awesomeness raised $162.5 million, Maker raised $65 million… the list goes on.

Although these companies were referred to as MCN’s in the marketplace many of them were expanding to countless other businesses and took on massive overhead in the process. Fullscreen launched a short-lived OTT platform. Awesomeness diversified beyond YouTube and expanded into music, movies, and even book publishing – they spread themselves very thin trying to do a lot of things that never panned out.

In addition to expanding beyond their core competency numerous MCN’s invested in signing the ‘top tier’ YouTube talent in upfront deals, which were not cheap. Then to recoup costs these MCN’s had to hire teams of sales people to sell brand deals for that talent (which oftentimes never came to fruition).

According to one talent manager the only reason top YouTubers join MCN’s is “because of minimum guarantee deals. That’s it… it’s free money. The MCN’s guarantees that the creator will make X amount in integration deals over the course of the term. And, if the MCN doesn’t deliver that amount in brand deals, then the MCN writes a check.”

Doling out ‘free money’ to talent that does nothing in return is hardly a sustainable business model.

RESENTMENT

Over the years there has been a lot of public backlash against MCN’s and this could not have helped when MCN’s go to sign on new creators. Also, smaller creators who were handing over a percentage of their revenue to MCN’s often felt taken advantage of. As a result, this new generation of creators seems far more cautious when it comes to joining MCN’s and are increasingly choosing to go it alone.

YouTube drama is commonplace these days, but in the early days of YouTube it was rare for YouTubers to air their grievances to the public. That all changed when in 2012 Ray William Johnson slammed Maker Studios claiming they were withholding money from him and holding his adsense account hostage. The drama went on for months between he and then Maker CEO Danny Diamond. Just over a year later when Maker was sold to Disney Danny ended up suing Disney as well as his former business partners. The whole ordeal painted MCN’s in a negative light and MCN’s were always looked at much more skeptically.

In the early days joining an MCN was a badge of having ‘made it’ in the YouTube world. Initially MCN’s where small and catered to the top talent. Over time this exclusivity gave way for a desire to scale and it was a landgrab to acquire talent. As a result you saw companies like Maker have 500 employees, but tens of thousands of channels, Awesomeness averaged 200+ channels for every employee. As a result, talent was largely left underserviced and many felt taken advantage of.

In one interview with an MCN executive, he confirmed that many YouTubers who joined MCN’s felt underwhelmed by their services, stating that:

“You see that same kind of conversations happening around MCNs. You have creators who say, “Hey, I’m giving you anywhere from 0-30% of my ad revenue, are you giving me that value in return?” A lot of creators don’t feel like they’re getting that value in return.”

As a result of so many creators complaining about wanting to get out of their MCN contracts YouTube rolled out a policy in 2013 making it much easier for YouTube Creators to get out of their MCN contracts.

To be clear, I’m not saying that all MCN’s don’t have viable business or that they’re all ripping off their talent. There are a lot of smart, talented, and moral people within the space. However, it does seem as though the heyday of MCN’s is largely passed.

So what does this mean for MCN’s?

As I outlined in a previous post, I think if MCN’s are to survive – the ones that will thrive and be successful are those that cater to specific niches and can actually sign enough of a small group of talent to own key verticals as well as properly service their talent.

It’s got diversity, great/big announcements, excitement and knowledgeable panels and speakers. This year definitely felt like the tipping point for the conference – getting so massive and (what felt very) mainstream. Having been to every single Vidcon so far (including the international ones) here’s my quick recap/takeaways:

IT’S BIG
Vidcon is fucking HUGE this year. I think there were over 30K attendees and it even sparked its own spinoff, TanaCon. Tanacon drew its own roster of 80+ big name influencers (Casey Neistat, etc) and apparently an additional 20k attendees, which ultimately resulted in it getting shut down.

CELEBRITY
We’ve been talking about influencers as celebs for a long time, but this year there was a noticeable shift.  Influencers pretty much did not mingle anywhere – security was through the roof, everything required an RFID wristband to get in and out, way more restricted access, etc.

In years past the influencers were relatively accessible, fans were screaming all over, etc. That was definitely not the case and it makes sense given the size of the crowds and potential dangers associated with that many people coming together in one place.

MAINSTREAM
Ray Kurzweil (AKA the guy who popularized singularity) spoke and Marshmello DJ’d.

Almost all the endemic brands and companies (other than the major platforms like YouTube, FB, and Insta) have been sidelined by major brands. In years past the MCN’s really dominated things here. Now its all Mars, Amazon, Adobe, etc.

FACEBOOK IS A PLAYER 
YouTube is still the big player, but the biggest announcement that got people excited was IGTV. If you watch their announcement video you’ll notice they’re basically going after the youtuber/influencer crowd – the tone is much younger than facebook and it is open to anyone.

Compare IGTV with what YouTube has done with FB watch and it makes sense. FB has kept FB watch heavily curated and limited to fewer partners – probably to appeal to an older demo and keep things more premium for advertisers.

I think the combo of IGTV and Facebook Watch ads up to a formidable competitor for YouTube (for ad dollars anyway).

PEOPLE STILL DON’T ‘GET IT’
The big draw for me was seeing the announcements from Facebook & Instagram, but the two biggest recurring themes within the programming was the same as in years  past, ie how brands and influencers work together and how to create content that will be shareable for _____ platform.

Personally, I’m frustrated as an advertiser that there’s still such a need for these talks. Influencer marketing and social video are not new – youtube has been around for over 12 years now. Brands and agencies need to get an understanding of the basics.

YOUTUBE IS STILL KING
YouTube is the backbone of the digital video and influencer ecosystem. Everyone gripes about them, and they’re slow moving, and easy to poke fun of (not innovating enough, not paying partners enough), but no one is seriously talking about abandoning them. They’re still considered ‘too big to fail’.

They didn’t have any big sexy announcements at their keynote and this year the CEO didn’t even come down to do the talk, but there’s no serious indication that they are defunct – they definitely have Facebook nipping at their heels, but they’re still the king.

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.

What Amazon’s role in the space is coming under increased scrutiny and speculation.

Is Amazon developing a YouTube competitor?

Every social media site on the planet has shifted its focus to video. Facebook, Snapchat, Instagram, and Tumblr have introduced or expanded their video capabilities, and are prioritizing live video in their algorithms. Even LinkedIn recently announced new video features.

In an interview from last year, Mark Zuckerberg went on the record stating that, “We’re entering this new golden age of video. I wouldn’t be surprised if you fast-forward five years and most of the content that people see on Facebook and are sharing on a day-to-day basis is video.”

According to research from Cisco, more than 80% of internet traffic will be video in a few years.

Amazon has already show they’re interested in this space and have been flirting with it for a while. They acquired Twitch in 2014, and Twitch seems to be doing well (although YouTube with YouTube live seems to be gaining ground). Amazon has also courted top influencers with a ability to build a custom Amazon landing page on which they could vend items featured in their videos and receive commissions on any successful sales.

Big picture – there is room for a viable competitor against YouTube.

Amazon has shown they’re able to move and innovate quickly, and while just 2-3 years ago no one would have guessed that the video space would be anything other than a monopoly, Facebook has made huge strides and in a short period of time they’ve established themselves as a video destination – they now get over 8 Billion Average Daily Video Views and 100 million hours of video watched every day.

Amazon has the capabilities to develop something that has the potential to be a YouTube style competitor, it certainly wouldn’t be easy. The ad boycotts against YouTube earlier this year signal that there’s room for competitors, and advertisers may want someone that could actually promise more ad friendly content.

That said, one area of the Amazon rumors I’m very skeptical of is the idea of them facilitating some type of marketplace where they would would pair vetted video creators and companies to create sponsored content. If they’re talking about custom/branded content – I don’t picture that happening.

There are lots of marketplaces out there for this type of thing, YouTube even bought Famebit. Amazon is a great tech company, but getting involved in the service side of things where you’re having to cater to both brands and influencers on a creative endeavor seems unlikely. I picture it being far too labor intensive.

Or so the thinking goes.

However, when it comes to influencer marketing, there can be too much of a good thing.

Over the past few years, there has been a wave of companies extolling the virtues of influencer marketing at scale (often using marketplaces to make the process turnkey).

While it’s terribly convenient for all parties involved, these companies operate on a flawed premise that you can automate relationships, creative, and credibility.

I’d argue that these influencer marketing marketplaces are quickly eroding credibility, and as a result, effectiveness.

Why is this?

There are countless platforms where influencers with a few thousand followers can opt in to create branded content (YouTube videos, Instagram and Facebook posts) in exchange for product or payment.

The “one-off” nature of these brand activations creates trust issues. An influencer can create a piece of content for a brand, then turn around and do another promotion on behalf of a competitor shortly thereafter.

There’s also the human element that is lacking from these arrangements. Simply reading a creative brief without talking to anyone is likely to leave a lot open to interpretation, and inevitably will result in miscommunication.

Talking points are important, but having someone represent your brand without even having a conversation seems sloppy and careless.

What is the impact of this going to be long-term?

Brand credibility gets diluted, influencer credibility gets diluted, and brands will have a ton of garbage content with few people buying.

In an era where anyone can fire off an email, having a conversation is more important than ever.

There is something to be said for having an in person meeting with. In my experience, people want to do ‘right by you’ if you’ve interacted with them in person. Enthusiasm and passion is infectious, but only if people can experience it and see it for themselves.

Automated influencer marketing are a shortcut that is undermining trust in the long run.

Influencers are different from banner ads. You’re not buying impressions — you’re working with people. We need to insert a human element into influencer marketing.