The Confessional #14: YouTube Exec

My latest interviewee for The Confessional is a former YouTube executive. This was a great interview that provides a lot of insight into the inner workings and attitudes of YouTube.

 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.

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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.