How YouTube has spawned a new industry nine years after first video
Stage crew workers prepare the set for a keynote speech by YouTube at the 2012 International Consumer Electronics Show in Las Vegas, Thursday, Jan. 12, 2012. (AP / Julie Jacobson)
Published Wednesday, April 23, 2014 8:33PM EDT
Last Updated Thursday, April 24, 2014 2:16PM EDT
Nine years ago today, Jawed Karim posted the first video ever on YouTube. It shows him standing in front of elephants at the San Diego Zoo talking about their trunks.
It may be only 18 seconds long, but it has since spawned an entirely new industry and changed the way every-day people become famous. This is what’s changed about YouTube: Those people we see in videos don’t always get there on their own; some use teams of managers and agents to help build their brands and generate views.
On one side of making money from YouTube there are the viral sensations. Licensing companies like Jukin Media are always looking for that next big hit. “We find clips before they go viral…we look for videos with a beginning, middle and end,” Andrew Barrett, director of marketing for Jukin, says to Kevin Newman Live.
Maybe you’ve seen that viral video of Canadian Jared Frank being kicked in the head by a train conductor as he took a selfie too close to the rails. Jukin is the company that licensed the rights to that video.
Jukin operates by offering content creators one of two options for revenue – either a straight buyout or a revenue share - and then tries to get the clip on TV shows or used in advertising campaigns. It’s been reported Frank could earn up to $250,000 for his 11-second video. Barrett wouldn’t say how much Frank may earn, but says “we are confident it will generate substantial revenue for the client.”
On the other side making money from YouTube there are artists who use the unrestricted platform to build brands and a following.
“YouTube has always been a platform for disenfranchised artists, people not on Hollywood’s radar, but who have real talent,” Richard Frias, President and CEO of Mighty Fresh Media says to Kevin Newman Live. He has been managing YouTube talent since 2007 and has seen a lot of things change as the industry develops.
One of the biggest stars Frias managed was Jessica Sanchez. He began working with her when she was 14, helping her record songs and create videos. Two years later she appeared on American Idol and finished second, in part because of her growing online following. As part of the deal with American Idol, is Frias had to sever ties with Sanchez when she made it to the top 12. Some of Frias’ clients have tried to go the traditional route, but when that wasn’t working they began working with Frias and building their brand online. He says YouTube is now akin to The Tonight Show in terms of getting noticed.
Frias is not alone, Michael Green, CEO of The Collective who used to manage Roseanne Barr and Martin Lawrence, and firms like Big Frame and Maker Studios are shifting to YouTube as a new source of income. And why not? Some YouTube channels dwarf TV shows for views. Ray William Johnson has more than 10 million subscribers.
“It’s a seismic shift,” says Green to USA Today.
Frias says there is a lot of politics and bureaucracy with getting a record deal or TV show, but “YouTube is a global platform with no barrier to entry and no cost to build a following.”
Contracts that content creators sign with YouTube to receive money from ads vary, but Frias says on average someone may get $1,500 for every million views. When he finds talent, he works with them to increase their brand. He suggests constantly posting, possibly daily, so there is a lot of searchable content. He also suggests creating a community that is unique and loves the creator for being themselves.
Frias will partner people with companies for ad campaigns, help them get agents if they want a record deal, and gets famous stars to appear in YouTube videos. He says often an established star will want to be in a video because the channel has a lot of viewers. Frias even works with the artists to create content and the artist can record in his company’s studio.
Once the YouTube star has a big enough brand, Frias tries to leverage the talent for merchandise or public appearances.
YouTube reports they have thousands of channels are making six-figure salaries.
YouTube, he says, provides a place where artists “can earn a substantial income for themselves.”