My latest interviewee for The Confessional co-founded an MCN, former talent manager, and is currently a director for a major, traditional, media network.

We covered a number of topics including:
– YouTube’s $100 million channel initiative breathed life into MCN’s
– MCN’s making money off clueless talent
– That MCN’s exploited talent early on and have to evolve

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 was it like when you were starting out and finding new talent?

I started back in 2010 – I was working in network TV and producing some digital content. I had some insight to how powerful it could be, but it wasn’t something people took seriously yet. A friend had suggested that I would be good in the YouTube space. At the time it felt almost fake or scammy. I thought,  “What do you build with a YouTube star? How do you make money off that?” The partner program was super new and selective — it was invitation only.

“Viral videos” were still a real thing – it was a very different time then.

What was it like when you founded your MCN?

Originally, we were strictly a talent management company. Nine or ten months after launching our company, people were knocking on our door trying to figure out how to get in, either as executives or investors. Everything really started to take off when there was this $100 million original channel initiative – where YouTube funded original content. We saw this investment happen, people were approaching us, and we understood things were going to accelerate fast. We needed to figure out how to stay ahead, to scale our business and compete.

As MCN’s have scaled – how has the relationship with talent changed?

I’m not a fan of management companies being owned and operated by networks. It’s like the old Hollywood studio system, people are getting screwed. You get the talent young and put them in a crazy contract for two years, and if they explode, then you’re there for the ride. You didn’t have to do anything.

Some of the bigger MCNs have become so massive there’s no way they are properly servicing their signed creators.  In early 2012, most of the networks were super focused and creators were looking for a place to call home  YouTube did not yet have a YouTube Space or really any formal creators team or production team, at that time networks swooped in and started signing up talent.  Back then, creators were just looking for basic things like management and advice.  So when these networks reached out and offered some service (even with no proof or credibility) many creators flattered and excited signed up without understanding what they were really signing up for.

There are creators who signed up for an MCN several years ago, but didn’t know what they signed up for..  It’s almost the same as how AOL will make millions of dollars off of people who are still signed to AOL dial up, even though there are clearly much better options out there and they have become pretty much irrelevant in that regard.

What does the industry need?

Some creators get big so fast while they’re still young. When you are just starting off, that’s when you come across scammy companies that screw you over. If you are coming up and that’s your first experience it’s going to make you paranoid. All because some email came in your inbox like, “This seems credible.” There are 16 year old kids who have never even had a summer job before… They likely do not have the knowledge or guidance to figure out who to partner with or when to say no.

We need conversations like: What resources do creators have to protect themselves? Who do they trust? Who is a credible source? The industry needs that credible, completely independent resource for creators. It would be helpful to come up with, like, the five things MCNs need to do. Number one is transparency with their earnings and where that money is coming from.  So many networks add no value to pre-roll. Creators need to know how the money is being generated.

I think Hank and John Green’s The Guild may help with a lot of this.

Is it harder for creators to make money on YouTube?

It’s more competitive, and it’s a more saturated market. There used to be creators who could work the system, to get to the front page — boom, they made their $5,000. Not anymore. It’s much harder to game the system, but YouTube has gamed it for themselves. There are a few creators that they heavily promote, maybe with commercials or recommended tabs, just these five people Youtube wants you to watch and make into stars.

There are definitely creators who are YouTube darlings – they aren’t that relevant anymore (they don’t have big audiences like they used to) but YouTube still always hast them at the events, on panels, getting write ups. I think that it’s a little bit of legacy thing. They’re pushing the idea that the darlings are still relevant, but really, they’re not.

I will say there are a lot more ad dollars being shifted into the eco-system which is a great.  But, we need to continue as an industry to question what is valuable and the market value.  Is it views?  What if they are not organic?  Is it content quality? Is it access to eyeballs that will convert to purchases?  Not every view is created equal… we need to continue to push to the forefront the most valuable assets in our industry so that we can continue to evolve.

What’s the role of MCN’s now and in the future?

MCNs have done a really good job of creating and pushing this idea that they are needed in the space — that’s literally what they do. They’re marketing themselves to the brands and ad agencies and as a result they’re generating deals.

In five years, many MCNs will still be around, but it’s going to continue to become far more competitive. We’re seeing more focused networks pop up, and established companies come into the space. MCNs might transform to become focused businesses. Maybe you’ll have companies that become agencies, then become production companies, then become… whatever.

I never would have thought we’d be where we are today. I genuinely thought that there was  going be a revolt against MCN’s by the top creators. Most networks built their brands on the backs of creators – and many exploited some people early on.  That being said, YouTube has stepped up to created some systems to flag exploitation.

The short term goal for many of the MCNs was to aggregate as many views as possible and sell.  Now that the excitement and novelty is starting to ware off, many of the independent (and even acquired) MCNs are forced to figure out a sustainable business.