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.

We covered a number of topics including:
-How the platform & money has changed the ecosystem
-What it was like working with MCN’s
-Why he left YouTube and got burnt out on the platform

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 got you into YouTube?

I started my channel after getting absorbed by the first Call of Duty scene for sniping videos on YouTube. Highlight reels of playing CoD and using sniper rifles and stumbling upon the commentary scene which only had three big YouTubers in it.

I remember at the time the largest CoD YouTuber in the world who had 25,000 followers and thinking to myself: “Wow, this is the best guy on YouTube, the biggest guy on YouTube,” and also thinking “This guy talks a lot about his life.” It really seemed that everybody was going to these videos to learn, not for the personalities. It was on that premise that I started my channel and ran it for about two and a half years.

What was it like when you first got momentum? What was your reaction?

It was a cool experience for me because my fellow CoD YouTubers became my best friends, literally. For two years, my best friends were all other CoD YouTubers who I would Skype with and play with, occasionally. And the feeling was very much being a part of this giant Internet community where people listened to what you were saying and viewed you as a leader. That just felt really great to be recognized for.

What was your experience like joining [Redacted – Name of MCN]?

At the time, the coolest thing that I felt had ever happened to me was being contacted by them. I was excited to make money from it because I started thinking, “Wow, this could be a job,” and knowing that I get about 60,000 views a day that’d be a hundred dollars a day. And I was in eleventh grade at the time.

The money was cool, but it was also so cool to have that recognition because of what that MCN was at the time. It was like a badge of honor. Then it all changed. All MCN models, or at least that MCN’s model moved to quantity over quality.

Why did you leave that network?

I wanted to speak with the ad sales team and work with them one-on-one. I thought that would be the best way to make brand partnerships — the creators recommending types of brands and types of branded content they wanted to do to the ad sales team, who would create decks around that and sell them. They got me in a meeting with the head of ad sales. I pitched to him for 30 minutes and the look on his face was like, “Why am I talking to this guy?”

They just didn’t seem to respect what we were doing that much or treat us like we were what made them big. It really came down to me wanting more brand deals than anything else. And from brands I cared about. I was one of the biggest gaming channels at the time, I was a top 100 YouTuber, and I barely saw any brand deals or any cool opportunities.

Do you feel like your experiences and the way you got into the community is similar to a lot of others? As an introvert using the platform to express yourself?

I would actually hypothesize that being an introvert leads you to be more interested in gaming and more engaged in those communities rather than it being a casual thing.

How do you feel the YouTube and gaming community as a whole has evolved over the years?

The gaming scene started out being a little personality-based…when YouTubers were doing half advice, half talking about their lives. Then YouTubers like myself shifted the community to be all about learning, whether it was advice about multiplayer, zombies or tricks, Easter eggs, those sort of things.

Soon around the time that I left, a lot of things shifted over to being more personality-based as YouTubers got so big that people wanted to see more of the behind-the-scenes stuff. You see this with the Let’s Play community, which quickly became the dominant category on YouTube. I remember the interest in my channnel and a lot of other gamers clearly dropped when people started getting 10 to 70 million views a month on videos of them playing little internet games that were really quirky, not really great mechanics or long-term appeal, but reacting to the game made for super entertaining content.

What about the injection of all the money? What do you think the impact of that has been?

It changed how a lot of brands are constructed to be businesses as much as they are brands. I respect it and I think the viewer ends up winning most of the time, because that person can put so much more time into making awesome content.

Anything else you want to say?

I was talking to my friend who leads a lot of influencer stuff about how incredibly powerful some partnerships between brands and influencers can be. And I think his point speaks to the creativity and deep understanding that YouTubers have of the YouTube content space that I think is underappreciated.

I think a lot of YouTubers have really, really cool ideas that they can act on, ranging from games to short films to businesses that would work. A lot of brands that don’t know what to do with creators could benefit from starting conversations with them.

His success comes with confusion and criticism by people who think he earns too much money.

PewDiePie is worth $12 million.

I’d argue that he’s way underpaid for his work.

PewDiePie is one of a growing number YouTubers monetizing the platform to the point of business-building revenue. The present media environment is such that any audience of substantial size can be expressed in real dollars, so this 26-year-old content creator earns about $4 million in revenue per year on ads shown against his content: in-game footage from various PC and console titles with his frenetic free-flowing commentary running over it. It’s a model that might be easy for old-school media orgs to dismiss; it’s inane and doesn’t seem to require too much talent to execute.

But to blow off the examples of PewDiePie and other YouTubers of his ilk would be a mistake on the level of undervaluing an entire family of stocks in an emerging industry. It’s too important.

To determine what is valuable, we ought to look at what tween girls value in the present. PewDiePie and his well-followed YouTuber associates—Jenna Marbles, the Fine Brothers, Michelle Phan, and so on—boast high-value millennial audiences in the millions. These self-employed creatives make their own high-dollar deals with brands and get contracts with major television networks, all while maintaining their homegrown audiences of consequential size. This feature makes them worth an embarrassing multiple of what they are paid today. To be a YouTube content creator of their level is to achieve nothing less than a new caliber of celebrity, one that is made way more efficient with help from technology. To be a well-subscribed talking head on a video site requires little more than the personal computer one already has at home.

YouTube series are to entertainment media what startups are to the business world, angling hard to be of widespread significance while operating on drastically scaled-down means. A 1080p Logitech webcam costs $60 and worthwhile ideas, though hard to come by, don’t cost a thing. Meanwhile, networks pay an average of $2 million to produce a TV pilot.

The more-affordable paradigm enabled by YouTube isn’t something to be laughed away, but to be embraced. The stars of The Big Bang Theory earn $1 million per episode apiece while PewDiePie earned $4 million over all of last year. This raises the pertinent question: Who’s worth more? The guy who can create, produce, and star in content that reaches hundreds of millions, or just the talent on its own?

The singing-dancing-and-acting triple threats of Hollywood today can’t compete on a business level with the incoming generation of self-producing, self-directing YouTube penta-threats. They are a new class of creators who can find an eager and substantial audience for even niche content. And this content is free, on-demand, and available all around the world.

Everyone knows Justin Bieber puts on a show, but PewDiePie is his own show. Felix Arvid Ulf Kjellberg—PewDiePie himself—is usually a floating head in the corner of his gameplay videos, but he still opens everything with an intro and closes with a farewell, making eye contact with millions[1]  on a regular basis and doing so with no intermediaries beyond the YouTube terms of service. This yields an audience intimacy enabled by “limbic resonance,” a neurological feature of our brains in which they release chemicals related to love, motivation, sexual gratification, and addiction in order to drive an emotional connection with someone. If you’re looking for effective marketing, follow the dopamine.

PewDiePie is popular in a significantly different and more personal way than standard movie and TV stars are. While Tom Cruise certainly fits the bill as famous, movie stars seem distant and untouchable, so we don’t care about them as much. Meanwhile, YouTubers speak directly to the camera, often in their own bedrooms. The fourth wall is broken beyond repair, and we don’t want them to fix it. This content is intimate, it’s different, and it has a depth to it.

Importantly, the successful YouTuber demonstrates vast monetary value without ever suggesting anything less than total attainability. The basic (yet effective) production value leaves behind a strong suggestion that the high-profile job of “star YouTuber” is a possibility to each and every viewer.

Well-done YouTube content has an intangible of aspirationality attached to it. An audience mentality of “I could do that too” goes a long way towards driving subscriber numbers higher and higher. To subscribe is, on some level, to cheer for an independent creator. People most enjoy watching Web content similar to what they would make themselves, were it not for limiting factors like time or worthwhile ideas.

PewDiePie and his fellow YouTube creators hook their fans on a deeper level than any celebrity could hope for, and those fans exert real-world marketplace influence.

When PewDiePie released a video this year about an older and notoriously glitchy game called Skate 3 (his walkthrough of the game featured an overweight skater named Bob who tumbled hilariously when his skateboard tricks failed), consumer interest in the dated and unremarkable title was renewed to the point that people started buying it again. Retailers had to ask Electronic Arts to reprint new copies. Wielding influence of this level has so far seen PewDiePie write a book, start a production company, and release an iPhone app.

PewDiePie’s proven ability to generate consequential real-world income from his free video content is far from an isolated incident. When John Green’s young adult novel The Fault In Our Stars was adapted for the big screen, he was able to mobilize his YouTube channel’s 2.6 million subscribers to go see it in theaters. They did so in droves, even beating the new Tom Cruise movie at the box office.

Rock band We The Kings pushed none other than Beyoncé out of her number one Billboard spot based on the strength of their YouTube following alone. Connor Franta, whose Internet culture and lifestyle videos have earned him 5 million subscribers, wrote a book that spent 16 weeks on the New York Times bestseller list. Independent content creators no longer need a major network’s vote of confidence in order to make substantial economic impacts.

This isn’t a flash in the pan.

The Internet has simultaneously made distribution free and caused content consumers to redraw the lines for what they find sufficiently entertaining to watch on a regular basis. The anyone-can-be-a-YouTuber mindset turns triple-A entertainment on its ear and allows for a more personal reassessment of what one finds truly engaging. The on-camera talent for these niche series can also be the writer, director, producer, editor, and network. The cost of a webcam be broken out over multiple episodes, and it eventually costs a few bucks per episode to create an entire series rather than a couple million to make one episode of something that might not have any staying power.

By comparison to the television industry’s bloated budgets, YouTube series are lean and mean, commonly a one-person effort from top to bottom. They operate within a paradigm that allows for a new sort of credibility, one that holds deep and recurring significance online with effectively fixed production costs. As such, it’s a credibility that scales; every time someone clicks a YouTuber’s subscribe button, he or she reveals something of his or her tastes and general sensibilities. Moreover, this is content that a growing number of millennials prefer to other formats.

A study by Hunter Qualitative Research yielded results that millennials enjoy YouTube entertainment more than television. They find it more relatable and it makes them feel better about their lives.

The era of YouTube celebrity might be one where a foul-mouthed videogamer is captain of the ship, but YouTube as a juggernaut of attention has real staying power. You only need to look so far as Smosh, the two-person comedy team that grew its YouTube presence to 21.5 million subscribers over 10 years of regular activity on the site. It made headlines when PewDiePie passed them in viewership in 2014 (he’s now the single-largest entity on the YouTube platform). Ridicule him if you must, but don’t be surprised when Felix Kjellberg is earning ten times his current income in the near future.

Until mainstream media organizations learn to tap into this new and lucrative zeitgeist, PewDiePie can be found on his YouTube page, electrocuting his girlfriend.