Being a YouTuber Is Now a Real Business
Berserking teen girls may forever be a staple of Vidcon, but the YouTube stars they worship have done a lot of growing up in the past year. And in turn, so has their industry.
Being a YouTube creator is blossoming into a bona fide grown-up business right before our eyes. As young creators mature into savvy entrepreneurs, the ecosystem is maturing along with them — with industry standards and a multichannel network landscape that’s supportive and thriving.
Though they're just starting to settle in, it's a far cry from the parasitic deals and chaotic, Wild West feel of those early years.
That’s the prevailing wind out of Vidcon 2014, only the fifth annual gathering of YouTube stars, their fans and just about everyone else associated with the exploding online video industry. An estimated 20,000 people came to the Anaheim Convention Center this past weekend, a number that’s nearly doubled every year since its inception.
'It's hard to make money on YouTube' — Or is it?
And for the first time at Vidcon, nearly every creator worth screaming for has been signed by a multichannel network — companies like Disney’s Maker Studios and independent holdouts Fullscreen and Collective Digital Studio, which manage diverse rosters of YouTube channels. And there’s good reason for that.
“The deals have gotten way better,” said Freddie Wong, digital impresario and cofounder of RocketJump, home of Video Game High School. "Early contracts were so psychotically criminal it was a joke. […] When we first started out, we fielded contracts ourselves and I remember thinking, 'I’m not a lawyer, but this is insane what they’re demanding.'"
Those demands included long terms — as many as five to seven years — and, in many cases, complete ownership of all videos created under their banner. As creators gain larger audiences and more business acumen, they're re-upping annually, maintaining at least partial ownership of their content and keeping a larger slice of the pie.
And that pie is getting bigger.
"It's hard to make money on YouTube" is near meme status in repetitions, a leftover notion from the days when pre-roll advertising was seen as the sole stream of revenue, split on terms dictated by Google. But tensions over that still roughly 60/40 split have eased; keynote speaker and Vidcon cofounder Hank Green (below) opened the conference Thursday with a message of gratitude toward YouTube — which, he pointed out, is the only social network that shares any revenue with creators.
That point was met with strong applause.
Of course, that attitude shift is made easy as money comes into creators' pockets from more places than just YouTube.
"My experience in the movie business was, even the idea of releasing a film that only stayed in theaters and didn’t go anywhere else … wasn’t even an idea,” said Malik Ducard, a former film studio executive and now content partnerships director at YouTube/Google. "It's a sign of maturity in the business that you do see some diversification."
Brands are buying in, offering hugely lucrative endorsement and integration deals as the YouTube audience grows. Merchandising is becoming more doable. And in the past year alone, live events — like the sold-out North American tour by Our 2nd Life — have added another promising moneymaking stream to the future of the business.
"[Live events] are a little bit less at this moment about making money; the fans are asking for it, they want to meet these people — they want them to come off the screen," said Stephanie Horbaczewski, cofounder, president and CEO of fashion, beauty and lifestyle multichannel network StyleHaul. "Look around you. Look how many people are here to meet these channels. It’s an extremely important part of the business. We’re starting to round out."
All those screaming fans
Speaking of those fans — wow. On the surface of Vidcon is all that screaming you’ve likely read about by now, and it lives up to the hype: Tween girls scan every inch of the Anaheim Convention Center for someone that's "YouTube famous." One appears roughly every five minutes, a cacophony of shrieks goes up, the race is on... and the mark either flees in terror or holds court until every last take-a-selfie-with-me request is satisfied.
It can be frighteningly intense.
But underlying the fan experience is the most important gathering of a commercial enterprise that's becoming altogether self-assured. The majority of panels are stuffed with entrepreneurs and focused on growing audience and making money. Sprinkled throughout the throngs of fans and creators are managers, brand representatives, publicists, and, in increasing numbers, Hollywood agents.
"It's everything from hanging out with and covering our current clients, to meeting new startups and MCNs, to signing new potential clients," one talent agent from a major agency told me before the conferences began.
The tip jar
Even YouTube itself chose this year's Vidcon to introduce new CEO Susan Wojcicki in a big way; just five months into her tenure, Wojcicki took the stage for a keynote that included a series of major announcements for the platform, nearly all designed to help creators make better quality videos and, in turn, enjoy a better quality of life.
"I believe our creators are the essence of YouTube," Wojcicki said. "That's why when I joined YouTube one of the first things I did was really get to know our creators and get to know what they’re doing. Because I see that all of you are re-inventing the platform and in a way that’s never been done before."
Key among the new YouTube features is "Fan Funding," a virtual "tip jar" model that allows fans to straight-up donate anything from $1 to $500 to their favorite creators. For some, to opt in will bring a major windfall when it goes live in the coming months. But not all creators will want to — or need to.
"The brand deals are so lucrative, we're not comfortable asking our fans to invest directly when everyone wins the other way," one major channel star said.
"We always tried to maintain a good revenue balance between what was coming in from YouTube pre-roll, what we did with advertisers, what the revenues were like on the video player on the website, and merch sales and everything else," said Rhett McLaughlin, one half of Rhett & Link, whose three popular channels are just a part of their mini-empire.
"Each of our brands monetizes in different ways," he said. "But it's really important for us to make sure that there's good balance, and that you don’t become wholly dependent on one partner and pre-roll."
There has been some crossover into "traditional" media — Grace Helbig, Mamrie Hart and Hannah Hart’s Camp Takota movie and The Annoying Orange TV shows are prime examples — but, in large part, Hollywood has more at stake in getting into the online video game than the other way around.
Living proof: DreamWorks Animation CEO (and by acquisition, Awesomeness TV overlord) Jeffrey Katzenberg onstage at Vidcon, talking passionately about his recently launched YouTube Nation channel (rather than 3D or international distribution, his former favorite topics).
"It overwhelmed me, my inability to consume it all," Katzenberg said of his early interactions with YouTube. "It was just an ocean of opportunity. And I kept feeling as though I was missing something… and there were things I should know and wanted to know. And it pissed me off that I would find out on like, the Today show what I should be watching on YouTube."
That content has come a long way from the early days, too. Where short-form, viral videos once ruled, purpose-made, serialized, professionally produced content is taking over.
"It's also a maturity of the audience," said Barry Blumberg, EVP of multichannel network Defy Media. "When YouTube started out, people were going there to look at 45-second videos of cats or turtles on skateboards or whatever […] but it's evolved, and so all I have to do is watch the way my 10-year-old son consumes videos on YouTube. He's as likely to watch a one-hour video as anything."
Do you think YouTube is in it for the long haul? Which stars are your favorites? Let us know in the comments.
(Article and body image via Mashable)
(Article and body image via Mashable)