How YouTube Blew It
By Aymar Jean ChristianJanuary 19, 2018
There's nothing different about it [than other YouTube Red projects]. We would have made it the same way. Literally, if her life cycle was shifted by three years, if she came through and pitched us the show and her success on YouTube, we'd be like, “Yes! Done! Makes total sense” … There's just nothing that would stop us from doing it.
Aside from the fact that Insecure is considerably better than anything on YouTube Red, let’s consider Kyncl’s timeline, and let’s also consider YouTube’s inability to develop the amazing creators whose careers it started or propelled. It seems like a no-brainer to have given a talent like Issa Rae the opportunity to develop her series on YouTube, so why didn’t he or YouTube?
The list of brilliant creators overlooked or underestimated by YouTube goes far beyond Issa Rae: Abbi Jacobson and Ilana Glazer (Broad City), Hannah Hart, Franchesca Ramsey, Grace Helbig, Todrick Hall, Lucas Cruikshank (Fred), Felicia Day, Trixie Mattel and Katya Zamolodchikova (UNHhhh), Jen Richards and Laura Zak (Her Story), Colleen Ballinger (Miranda Sings; Haters Back Off!) and Cecile Emeke (Ackee & Saltfish) are just a few of the creators who have gone on to make long-format shows and films or achieve mainstream acclaim. Several other creators who initially published their shows on Vimeo and later published on YouTube — including Adam Goldman (The Outs), Ingrid Jungermann (F to 7th), and Sam Bailey (You’re So Talented, Brown Girls) — all landed bigger development deals on other networks. And it’s not surprising that most of these creators are women, LGBTQ people, and people of color, who YouTube has consistently failed to value because their subscriber numbers tend to be lower.
All of these are missed opportunities. Imagine if all those stars had stayed to develop their projects on YouTube. Imagine if that was YouTube Red’s programming slate. We would be talking about YouTube in the same breath as Netflix as a leading innovator in TV development, not the farm system for artists who succeed elsewhere.
For years, many in the industry excused YouTube’s inconsistent development of its own talent because the platform was in the red. It wasn’t until the last few years that YouTube became profitable. Today, it’s valued at upward of $70 billion, whereas Google bought it for $1.6 billion in 2006. I argue the platform could have reached that valuation faster, and might be even more valuable now, had Alphabet (Google) invested earlier and taken more risks. Back in 2012, as Netflix was gearing up for House of Cards, shelling out $100 million to beat out HBO for the series, YouTube was spending roughly the same amount of money but spread out over 100 channels. And most of those channels weren’t curated by homegrown creators but by mainstream media corporations and celebrities without a demonstrated track record of getting consistent online attention or telling interesting stories. YouTube had the same resources as Netlfix and Hulu and Amazon, it just spent them in all the wrong places.
In the wake of the platform’s disregard for its own talent, multichannel networks (MCNs) stepped in, signing up hundreds and sometimes tens of thousands of creators to give them better targeting and monetization tools, representation in Hollywood and with brands, and occasional investments in original production. Investor interest in MCNs skyrocketed, eventually reaching the many billions Google had invested in YouTube itself. But creators had a number of complaints with MCNs, most notably that the networks only invested in the top two to five percent of its creators, leaving everyone else with minimal support.
YouTube’s subsequent development plans involved relying almost entirely on quantitative data to decide which channels were worthy of investment and preference in marketing. The company gave the top five percent of channels in each category preferential treatment in representation on its advertising networks and algorithms. But this quantitative perspective on cultural development entirely misses the value of narrative series for branding a network. Series aren’t only valuable to networks because they are popular, even though every network needs at least one “hit” series or franchise — HBO has Game of Thrones, AMC has The Walking Dead, Netflix has Marvel, ABC had Shonda Rhimes. Instead, networks develop series to get attention from specific, passionate communities, critics, and the industry as well. HBO developed Girls for six seasons despite it never being particularly popular, same with FX for Louie and NBC for Community. These series attracted fan dedication and made the networks culturally relevant, thereby inviting other viewers who weren’t necessarily fans of those shows to remember to check out what the channel was offering.
Under YouTube’s purely quantitative calculus, Issa Rae never had a chance. The first episode of The Misadventures of Awkward Black Girl, which made Rae an instant star all the way back in 2011, still has under three million views, way less than your average PewDiePie or Epic Rap Battles of History episode. But unlike those bro-y viral videos, Awkward Black Girl has heart and sophistication. Especially in the context of the rise of white supremacy in the United States, the show is still incredibly valuable to our culture.
For years, I’ve been wondering why mainstream media networks like Comedy Central, HBO, FX, and Showtime have showed more interest in web-grown creators than the platforms that helped them find their audiences. Rae got meetings in Hollywood after Awkward Black Girl took off and even scored a development deal at ABC for another show with Shonda Rhimes executive producing a couple years after. Rae’s potential was no secret, so where was YouTube?
As I argue in my recently published book, Open TV, with so many producers making online video and brands reluctant to invest in them, corporate web distributors amassed large swaths of creators to profit from advertising or fan subscription on the scale of big data. Nowhere was this dynamic more visible than YouTube. YouTube’s very name implies empowering creators and their fans, but the company could not avoid the challenges of scaling their labor and attention. YouTube’s most seasoned and respected partners have long criticized the company in public for not supporting “YouTubers” or “YouTube creators” — the stars, producers, and entrepreneurs who started their own channels and coaxed tens of millions of fans to subscribe. They griped YouTube had become more focused on raising revenue from the fruits of their labor than investing in those who supply the platform with content.
By aggregating videos from millions of producers, YouTube profited from their labor without having to invest in it. Creators continually labored for views. In summer 2013, investor Jason Calacanis penned a much-discussed diatribe against YouTube’s nearly 50-50 revenue split between creators and itself: “Since YouTube doesn’t have to create any content, just aggregate it, they don’t need to worry about the individual profitability of any one brand. Things can be dying and soaring and going sideways throughout their ecosystem, but as long as they have a ton of traffic and control the relationships with advertisers, they win.” Here, Calacanis identifies the advantages of scale in digital distribution. In YouTube’s earliest years, small groups of producers could develop a following. YouTube was interested in growing the network and showcased work from indie creators without large subscriber bases.
In 2008, I spoke to YouTube entertainment editor David McMillan, when one of his jobs was curating work for the site’s homepage. He spoke of YouTube as actively nurturing connections between new TV producers and fans: “We try to add some diversity […] We think there are videos that don’t go viral but are worthy of being seen. […] YouTube, when it does work well, is a place for people to communicate back and forth.” However, even then McMillan saw production value standards rising: “The early vloggers probably had the benefit of there being not a lot out there […] [now] you’re just competing with so much content.” With more producers investing their own time to produce for YouTube, they increased standards and volume, decreasing YouTube’s interest in any one channel. Seven years later, YouTuber Akilah Hughes critiqued YouTube’s lack of interest in its black stars, from its choices for its first global marketing campaign (including Vietnamese-American makeup guru Michelle Phan, Latina Bethany Mota, and white Rosanna Pansino); poor comment moderation (“subscriber gap”); and lack of diversity at its annual convention, VidCon, where one star, Adande Thorne, held 24 hours of fan meet-and-greets outside the convention center because he was not invited. Realizing they had forsaken smaller, diverse creators, YouTube started mentoring and production programs for black- and woman-identified creators in 2016.
One of those early vloggers, and VidCon co-founder, Hank Green, described the climate as YouTubers against YouTube, MCNs, and advertisers: “[They] all want viewership consolidated. It’s easier to buy and sell a few large properties than many small ones. These institutions control how a HUGE number of dollars are spent so there is less incentive to create niche content.” Green, who with his brother John founded the Vlogbrothers channel offering educational content for millions of passionate fans of John’s young adult novels, contrasts the pursuit of mass profits with the challenges indie creators face attracting fans, whose attention is valuable to advertisers. This was not Green’s first critique of how YouTube managed the creator-fan relationship. He publicly criticized YouTube for adjusting how it counts subscribers and openly advocated for creators to stop relying on advertising and pursue direct fan sponsorship.
Creator discontent with YouTube grew. After penning his screed against YouTube’s lopsided ad revenue split with creators, Calacanis proposed a YouTube Bill of Rights to protect creators, including more transparency on who was advertising on YouTube, a better revenue split from AdSense (Google’s advertising network), and more investment from Google in its creators. In 2016, Green started the Internet Creators Guild as a nonprofit to advocate for web producers. The Vlogbrothers even started an off-YouTube platform called Subbable, offering fans the chance to directly support creators (it eventually sold to its bigger competitor Patreon). That year YouTube, for its part, started offering paid channels for fans to support channels monthly, but only to select, corporate users at first. The early results of this premium strategy were mixed, with a number of partners publicly expressing their disappointment at fan adoption of individual subscriptions. The debut of competitors like Patreon, VHX, Vimeo, and Vessel cast doubt on whether YouTube offered the service to enough channels in time. In 2015, seeing the market shift rapidly, YouTube relaunched YouTube Red to allow fans to subscribe to YouTube’s own original programming, produced at the length of legacy TV programs.
As it worked to consolidate, YouTube fractured, first losing creators to rival aggregators like Vessel, Vimeo, social media platforms, and most significantly to new start-ups in multichannel networks. Multichannel networks stepped into the online video market to do what YouTube avoided: manage creators’ careers and help them sell to brands and advertisers. MCNs pursued scale by aggregating independent producers and their fans. Denise Mann shows how this pursuit of scale exploited independents to attract Silicon Valley and Hollywood investors. In 2009, firms invested less than $100 million in multichannel networks; by the end of 2012 investments jumped to almost $500 million. By 2014, $1.65 billion had been invested, matching how much Google spent on YouTube just eight years prior. Creators like Hank Green decried this escalation of investment as losing sight of the independent spirit that attracted fans and independent producers to YouTube in the first place. Of course, some creators had leverage as they sought value from YouTube, MCNs, and major brands. As pay-off for their labor, YouTubers grew their subscriber bases as MCNs rose to power to aggregate their fans; by 2016, analytics company VidStatsX estimated at least 2,000 channels had over one million subscribers. Moreover, the growth of competing social media platforms, particularly Twitter, Snapchat, Instagram, Facebook, and Vine, gave YouTubers alternative platforms to leverage fans’ attention. Ultimately, though, distributors had the upper hand by aggregating creators and their fans, but fan loyalty rested with creators first, so both YouTube and the MCNs needed to support these sincere connections to continue to profit from their labor. This tension fueled controversies as producers and distributors pursued capital in a constantly changing market.
YouTube’s staggering growth, coupled with its lack of investment in independents, enriched multichannel networks. We can find evidence of this through the stories of the site’s most high-profile creators. Known for his viral video commentary show =3, Ray William Johnson became the most subscribed YouTuber in 2011 with almost four million subscribers, surpassing Japanese-American comedian Ryan Higa. Johnson held the spot throughout 2012, growing his channel to six million subscribers. Even as his popularity grew, competitors were angling for his spot. Competition and the need for production support led Johnson to sign with Maker Studios two years earlier. Maker offered marketing support, audience development, and talent management. But in the fall of 2012 Johnson left Maker, claiming the multichannel network wanted him to sign a contract giving 40 percent of his AdSense revenue and over 50 percent of =3’s intellectual property, among other allegations: “Youtube-based networks are built around exploiting Youtube channels for profit, and I totally understand that.” Johnson realized he gave away too much of his value for the marketing and development support multichannel networks offered.
In January 2013, Ian Hecox and Anthony Padilla’s dude comedy channel SMOSH, which sold to MCN Alloy Digital, surpassed Johnson as the most subscribed channel on YouTube. Eager to find a new backer for his work, Johnson entered a partnership with independent network Blip, itself transitioning away from curating independent web series to promoting creators with bigger fan bases and cheaper productions. In an ironic twist, MCN Maker Studios then purchased Blip for less than $10 million. One year later, Disney purchased Maker Studios for $675 million dollars. By 2015, Johnson was the 27th-most-subscribed YouTuber and back to the place he’d tried to escape. Maker’s PewDiePie took the top spot, with the top 30 comprised of MCNs like Machinima and VEVO (its channels for studio musicians like Rihanna and Justin Bieber) a sprinkling of long-producing YouTubers like SMOSH and the Fine Brothers (represented by Fullscreen), and a handful of indies led by Jenna Marbles and Ryan Higa.
How did Maker, a studio with less name recognition, beat indie heavyweight Johnson in attracting fans? Like Machinima before them, Maker built their network on signing up as many creators as possible, leveraging scale to increase their chances of finding a hit. At the time of the Disney acquisition, Maker Studios reported 5.5 billion views a month across 55,000 channels. Disney purchased Maker for its “great access to data and algorithms you wouldn’t have unless you had volume,” CEO Bob Iger told Variety. Even though Maker described their pursuit of scale as empowering YouTubers, nowhere did Iger mention the indie creators who built Maker into the “United Artists” for online video, as The New York Times, The Wrap, and then–chief operating officer (and eventual head of Maker) Courtney Holt all described it. By contrast, Johnson built his fan base by covering independent YouTube productions. Commentary shows, extending enduring TV genres like “fail” videos (think America’s Funniest Home Videos), were very popular on YouTube. Competition in the genre was stiff, but fans for offbeat YouTube videos were plenty.
Both Johnson and SMOSH benefited from starting their channels on YouTube when the site had fewer professionally produced videos and did not invest in multichannel networks. Early on, YouTube incentivized original production, starting with the 2007 partner program. Originally invitation-only, the partner program allowed creators the option of putting ads on their videos for a majority cut of the display and video advertising revenue, split with YouTube. SMOSH and Maker Studios co-founder Lisa Donovan were among the very first partners. It was not until 2012 that YouTube opened the partner program to all YouTube creators. Digital advertising rates were low, so partners needed to attract millions of views to make a living. By the time anyone could join, partners had a small suite of advertising technologies with different ways to view ads (pre-roll, post-roll, skippable, or banner) with different price points for each one. Creators who worked assiduously to populate their channels with original programming could attract enough fan attention and generate six-figure incomes from their attention to ads. Most creators made negligible amounts. Multichannel networks stepped in, offering creators better rates and more program development support.
By the time YouTube recognized its problem and tried to fix it, it had already missed a big opportunity to invest in and grow production on its platform, and investors chased MCNs and their YouTuber clients. An estimated 200 multichannel networks were offering marketing and support for tens of thousands of creators. Networks like Big Frame attracted creators by understanding their challenges producing independently for a vast network like YouTube: “These guys are starring in the video, doing the lighting, music, editing and uploading, and that’s just what 20 percent of their time is spent on. […] They have to be their own marketing company, as well,” Big Frame co-founder Sarah Evershed told USA Today. Big Frame made a name for itself by partnering their clients — among them comedian DeStorm Power and director Mike Diva — with big media companies like Disney, 20th Century Fox, and BBC America to support marketing campaigns. The company’s co-founders Evershed and Steve Raymond were vocal opponents of malpractice among multichannel networks, and penned a “challenge” to their peers to value creators, fans, and sponsors over views. Multichannel networks’ focus on leveraging scale led to “bad contracts,” with low, fixed CPMs, no right of contract termination, and “unsustainable growth rates” — networks signing up hundreds of channels per month. Penna and Raymond published this critique on the same day they launched a new initiative to brand Big Frame’s top channels (of 160) as “Forefront,” which Variety reporter Andrew Wallenstein characterized as a shift away from talent management to “marketing at scale.” Two years later, after taking on some debt, Big Frame and its 300 channels with 39 million subscribers sold for $15 million to youth-focused multichannel network AwesomenessTV; AwesomenessTV itself had been acquired by Steven Spielberg’s DreamWorks Studios, which committed it to “aggressive growth,” in direct opposition to Big Frame’s mission of serving a small number of talented producers.
Multichannel networks were best at serving top creators, whose large fan bases they could leverage to get meetings with major advertisers and Hollywood studios. The lengthy and complex process of negotiating deals in Hollywood could lead to big pay-offs but also corruption. Collective Digital Studio, an offshoot of management firm The Collective, showed this in 2011 when they negotiated one of the biggest YouTube-to-TV deals licensing Dane Boedigheimer’s The Annoying Orange to cable channel Cartoon Network. The Annoying Orange was a deceptively simple narrative series about an orange with CGI face who annoys the fruits and vegetables around him; conceptually it recalled Fred by Lucas Cruikshank, who ran effects on his voice to sound like an annoying preteen. Fred ran on cable channel Nickelodeon for years as series and movies. Like Cruikshank before him, Boedigheimer’s idea skyrocketed his channel to the top 10 of YouTube’s most subscribed, with two million subscribers and nearly one billion views at the time of the deal. The simple concept — one character, no serial plot — allowed Collective to license the Annoying Orange for commercials and other campaigns. Even as his YouTube channel fell in the rankings, Boedigheimer appeared in the press as a new media marvel. Yet in 2014, Boedigheimer sued Collective for not paying any revenue from the licensing of The Annoying Orange; the suit alleged The Collective was in financial ruin and did not have the funds to pay him.
Focusing on top creators made sense for multichannel networks working to secure large investments and keep growing, but the practice made skeptics of many of YouTube’s creators, who desperately sought production support. After MCN Revision3 sold to Discovery Communication for a reported $30 to $40 million, they worked to solidify their relationship with affiliated producer Philip DeFranco, who had been vlogging on YouTube since 2006. Revision3 paid him “six figures per month,” most of which he reportedly invested back in his ventures. A year after the Discovery deal, Revision3 purchased DeFranco Creative and installed him as a vice president. DeFranco signed because Revision3 had given him access to brand integration and ad sales: “[I]f you have 10,000 people in your network, how can you actually help them? The focus, it’s not there. With Revision3, you don't have to go to a third party and [risk] getting ripped.” DeFranco clearly felt attended to by Revision3, enough to sign over the channels he spent seven years building. Yet as Revision3 courted DeFranco, they lost Benny and Rafi Fine, who left the network for Fullscreen months after the DeFranco acquisition. Fullscreen beat out Revision3 by offering direct production financing: “A handful of us have found these type of deals but they are very hard to come by, and not all of Fullscreen’s competitors are trying to make those type of deals,” Rafi Fine told Variety. After joining Fullscreen, the Fine Brothers started producing the work of other creators, selling series to cable channels and developing a feature film.
Usually reserved for top creators, production support is critical in an economy where independent producers must constantly create work to keep fan attention. Fullscreen made its name by offering some of this, representing leading YouTube stars, like violinist Lindsey Stirling and talk show host Michael Buckley, as a “helpful mediator between YouTube and Hollywood talent agencies” as well as between established and emerging YouTubers to encourage collaboration and resource sharing. The MCN supported creators directly and publicly through grant programs: $5 million to 100 creators in 2011; $1 million in marketing grants in 2012; $10 million for original programming in 2014. On the strength of its scale and its talent management unit, headed by former Creative Artists Agency executive Larry Shapiro, Fullscreen sold to Otter Media (backed by producer Peter Chernin and AT&T) for a reported $300 million. At the time of sale Fullscreen had signed 50,000 creators with 450 million subscribers contributing four billion views monthly. In 2016, Fullscreen launched “fullscreen,” a subscription media platform with original programming, but has since shuttered it.
What happened to multichannel networks once they sold to major investors and media conglomerates? They focused on growth, and in the case of Maker Studios, increasing the value of their investors’ intellectual property while cutting costs (jobs). In the months after selling itself to Disney in 2014, Maker Studios focused on owning its own platform in Maker.TV, growing its subscriber base through deals, servicing Disney and trimming staff. Co-founders and siblings Lisa and Ben Donovan left months after the deal was finalized and 10 percent of the staff lost their jobs. Maker announced seven new series at its NewFront presentation following the acquisition, four from its YouTube stars (Chester See, Shay “Shay Carl” Butler, Joseph Garrett, and P’Trique); two from TV and film veterans Morgan Spurlock, Keegan-Michael Key, and Jordan Peele; and one, its biggest production, in partnership with Nylon magazine. To grow its gaming vertical Polaris, the network partnered with the third-most-popular gaming network on YouTube — it was already partnered with the top two, PewDiePie and Stampylongnose. Aside from Maker’s clear growth potential as YouTube’s fastest growing multichannel network, Disney got an instant YouTube competitor with its own player in Maker.TV (formerly of Blip TV) where it could market content from ABC, ESPN, and the Disney Channel; Maker’s 2015 presentation at the NewFronts revealed its work for Marvel, ESPN, and ABC’s Lincoln Square Productions. Later that year Disney deputized 14 Maker creators to live-stream an unboxing of toys for its newest franchise, Star Wars, for which Disney paid $4 billion. Maker provided Disney with a necessary cost savings; right before announcing its purchase of Maker, Disney fired 700 employees, or roughly one quarter, of its Interactive Division. Two years later, Disney cut 30 Maker jobs in a “strategic adjustment.”
YouTube started regulating the MCN-creator relationship in 2013 with new features and rules designed to benefit creators large and small, but the policies stoked resentment among many smaller channels. According to YouTube’s Help resource, “MCNs are not affiliated with or endorsed by YouTube or Google,” but Google had to acknowledge the growing role of MCNs on the site — and, by extension, its own inability to manage and invest in YouTubers. Yet Google’s intervention was motivated primarily by its need to maintain relationships with major copyright holders, particularly musicians. In the summer of 2013, the National Music Publishers Association sued Fullscreen over its use of unlicensed copyrighted music in its videos; NMPA had just settled with Maker Studios. Two months later, YouTube instituted new rules for MCNs and their channels, including creating a button for smaller channels to acknowledge their discontent with an MCN (though YouTube will not intervene in contract disputes) and showing comparisons between MCN and YouTube Partner ad rates in YouTube Analytics reports. YouTube representatives said the site worked with MCNs on the rules, yet months later when YouTube started implementing the rules, Maker distanced itself from the “unpartner” button in a message to its channels: “Maker does not use this feature for communication about its contracts and this button is not a legal notice.”
The biggest policy shift was YouTube creating two tiers of MCN status: “Managed” and “Affiliate” channels. Videos from Managed creators received exemption from copyright review; YouTube would hold the MCN responsible. Affiliate channels bear responsibility for their intellectual property rights management and were subject to a copyright review process from YouTube that took from a few hours to a few days, during which, initially, YouTubers would lose out of ad revenue. By creating tiers in this new “monetization review” process, YouTube made explicit the rising divide between top and emerging creators on MCNs. Small creators decried the expected delays in the release of their programs and the higher bar it set for getting boutique service from MCNs. Under the rules, by taking on “managed” channels, MCNs agreed to penalties across its networks for copyright violations and take on full liability in litigation. Smaller creators feared this made it less likely MCNs would expand their upper tiers: “The fact that smaller channels are those who have the most to lose with these changes is plain to see. It brings up the idea that starting a successful YouTube channel just became that much harder.”
In December 2013, YouTube implemented its Content ID system on the smaller Affiliates, screening their videos for matches in a database of 25 million reference files for copyrighted content. Gaming channels were hardest hit. The day MCNs announced the changes, YouTube gameplay video creator MaskedGamer, who by 2015 had 400,000 subscribers, uploaded a video in response, writing in the “info” section, “I've never subjected my network to a single copyright strike, yet I'm not big enough or trustworthy enough to receive ‘Managed’ status, which would continue to provide me with the key benefit that I joined the network for - instant monetization without any oversight or scrutiny by Google/Youtube.” MaskedGamer evokes a feeling of being policed by YouTube and undervalued by MCNs. The rise of new MCN competitors shows this feeling was widespread. The month YouTube implemented the new Content ID system, a new MCN called Freedom! premiered. Started by George Vanous after selling his gaming MCN, TGN, to BroadbandTV, Freedom! promised creators a “no lock-in” contract (you can leave anytime) and Managed status if you did not receive any violations in your first videos. In a year and a half it reported over 45 million daily views by signing up over 1,500 new channels every day. Nevertheless independent forums on YTtalk, and essays by smaller creators, warn creators about Freedom! based on its ability to promote, monetize, and legally defend so many channels.
The Content ID controversy shows the pitfalls of YouTube’s pursuit of legitimacy from major rights holders to secure big buys from advertisers and fans. After asking YouTubers for feedback on the policy, YouTube addressed the concerns of smaller creators by allowing them to profit temporarily from videos accused of infringing copyright; meanwhile YouTube reported paying out $2 billion to major rights holders through Content ID. To make it easier for creators to find MCNs right for them, YouTube also introduced a certification program available only to partners as a way to establish quality standards for networks. Completing the program made channels eligible for inclusion in a “Service Provider Directory” of certified networks organized by services (talent management, caption and translation, production, music licensing, et cetera) that creators could search to find representation. After years of supporting false copyright claims, YouTube finally agreed to legally defend creators for fair use in 2015, but it started by supporting just four channels.
YouTube’s primary goal is increasing revenue, not catering to new and smaller creators. When Google advertising chief Susan Wojcicki stepped in as CEO of YouTube she spoke of how the site “gives a voice to people who would otherwise not have a voice.” Yet, like the MCNs, YouTube’s major initiatives promoted the site’s cream of the crop — notably the global marketing campaigns of Phan, Mota, and Pansino, along with VICE News, Maker’s Epic Rap Battles of History, and the third season of Freddie Wong’s Video Game High School. At the 2014 NewFront, Google announced its “preferred” content initiative, where it reserves ad slots for the top five percent of its creators. Brands could buy Nielsen-rated audiences in bulk and with guarantees of minimum levels of viewership. Google publicly announced the top one percent across 14 content verticals (Comedy, Cars, News, Music, et cetera); the 385 channels boasted considerably more indie creators than YouTube’s 100 premium channels years prior, and YouTube reported nearly selling out of preferred ad inventory. In 2015, YouTube reported top advertisers increased their spend by 60 percent compared to 2014. By 2016, the strategy appeared to be working when marketing conglomerate Interpublic Group gave YouTube its biggest upfront deal to date by shifting $250 million of its $5 billion TV ad spending budget to the company, bringing ads from Johnson & Johnson, Fiat, Coca-Cola and others to online video. In its pursuit of top advertisers, YouTube increased its censorship of content, removing videos that it deemed not “ad-friendly,” even from creators like DeFranco: “I’m not going to censor myself […] Feels a little bit like getting stabbed in the back after 10 years,” he tweeted.
At the same time, however, Google reorganized YouTube’s content division to directly develop original programming for the first time and structure their network like a traditional broadcast or cable channel. YouTube picked MTV executive Susanne Daniels to head programming, with NNN founder Tim Shey heading scripted content and NNN’s former vice president of programming and development, Ben Relles, as head of comedy. The development team funded top creators and brokered deals with Hollywood studios. YouTube Red debuted in 2016 with long-form originals and feature-length movies from top producers like PewDiePie (Scare PewDiePie), AwesomenessTV (Dance Camp, Foursome), Fine Brothers (Sing It!), BlackBoxTV (Fight of the Living Dead), Rooster Teeth (Lazer Team), and Buzzfeed’s Quinta Brunson and Try Guys (Broke and Squad Wars). Red released at least 25 originals in 2016 to around 1.5 million subscribers, far less than its competitors. By 2017, it planned to release its first drama and biggest program investment: an extension of the Step Up dance film franchise executive produced by movie star Channing Tatum. Now YouTube is further limiting access to preferred advertising and hiring 10,000 humans to screen ad placements. Investing in quality control might prevent another “adpocalypse” but can it elevate YouTube's brand to a destination for quality storytelling?
Managing thousands of producers is precarious. YouTube and its multichannel networks replicated hierarchies of media production, the very inequalities driving millions of creators to produce for an open-upload site like YouTube in the first place. In their bid for market dominance on YouTube, “MCNs produce a new overflow they cannot contain themselves” and “decelerated the momentum for aesthetic creation,” according to Patrick Vonderau, so creators flocked to new apps in the video economy. Rather than invest in new and upcoming creators, Google invested in MCNs (including Machinima) and tech platforms that managed large amounts of creators, as seen in its purchase of FameBit, a self-service platform connecting brands and YouTubers. In its first decade, YouTube dramatically grew its valuation without investing in indie creators, multichannel networks organized them for the company and profited handsomely from indie labor. When YouTube finally stepped in, they did so to protect major rights holders and the most popular producers it feared losing to competitors. Meanwhile the indie creators who attracted fan attention to YouTube still hustled for views and suffered low ad rates due to lack of representation and their ongoing marginalization on the site.
There’s no denying that YouTube has, to date, failed to develop itself into anything beyond a repository for a wide-ranging number of videos and creators whose fans care little about YouTube itself and are more invested in the talent they love. If YouTube had been ahead of Netflix, which started developing original programming in 2012, the excitement would've given them the necessary buzz to become a major player faster. Now YouTube just looks like they're trying to play catch-up to Netflix, and it’s sad.
YouTube is expanding its development operations and may shift to more writer-driven, indie-friendly series. The other tech companies who have recently pledged billions in original TV programming, including Amazon, Apple, and Facebook, should avoid the big data trap. To get big data they’re investing big production, hiring mainstream media or corporate development executives, and hoping algorithms and scale will make them culturally relevant. But the lesson of YouTube is algorithmic targeting and scale are not enough to make a platform stand out. Automating your development organization through technology will only get you so far. Working with who’s already in Hollywood will limit the originality of the slate. If you are trying to “brand” your platform and give it an identity, you must first consider the identities of the people you invest in. You should consider their ability to tell complex, interesting, never-before-seen stories and not only their ability to get noticed by an agency or a ton of views and comments. With Logan Paul gone, YouTube has a chance to invest in quality. Issa Rae’s Color Creative TV is building a diverse pipeline in Hollywood and I’m doing my part too.
This essay is adapted from Open TV: Innovation beyond Hollywood and the Rise of Web Television, out this month from NYU Press.
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