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Why big media is buying YouTube stars — and who could be next

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It’s been clear for a while now that big media brands are taking web video seriously, but how to get organic traction within the space has proven to be a bit of a pickle. The clearest example of this? The way in which YouTube’s funded originals program has evolved — while the first round was full of big-media brands making stabs at content for the web video audience, the second round has seen YouTube scale back, and focus largely on YouTube-grown talent.

But major networks and studios are now taking a new tact. The latest strategy: Instead of invading YouTube, major companies are acquiring those who built their understanding of YouTube from the ground up — people who have proven their ability to grow and engage with audiences on the platform. Earlier in May, for example, DreamWorks Animation picked up AwesomenessTV for a reported $33 million. And last week, Phil DeFranco, who’s been working with Revision3 (s DISCA) since 2012, was acquired by the Discovery-owned company.

What Revision3 has paid for (it’s still unclear how much they paid) are the thriving channels that DeFranco has created, including Streamy-winning Sourcefed and his own Philip DeFranco Show. But Phil DeFranco comes with the deal — he’s joining Rev3 as a programming exec.

Why make a partnership like this? In an interview with New Media Rockstars, DeFranco’s financial advisor Mike Bienstock said this:

The reality is that the sales machine that everybody loves through the AdSense mechanism can’t keep up with inventory. What’s going to happen is that customization is important in terms of brand deals, and custom ad deals are going to be more important. People aren’t going to throw ads on X thousand or X million impressions — they’re going to want to say, ‘Hey, I want my ad against SourceFed Nerd.’ Because I have excellent demo data on audience — I don’t care what CPMs are — I’m going to pay much greater than the CPM scenario because we have a full-blown, interactive engagement with the audience.

In short: While AdSense is great, what Discovery/Revision3 offer DeFranco and his team is an advanced approach to putting advertising on their content. It’s the next evolution of building the business, and one other YouTubers are considering.

Because in general, one signpost of this industry’s maturation is the fact that so many known creators have made similar sorts of moves. Ze Frank is, after a similar aqui-hire, executive vice-president of video at Buzzfeed. My Damn Channel is home base for Grace Helbig. And even theoretically independent creators work closely with MCNs and management companies.

Of course, the obvious question now is: who’s next? Here are just a couple of examples of creators who might be poised for bigger deals:

Anyone else you think might benefit from such a deal (or any companies that should consider a similar aqui-hire)? Let us know in the comments!

Photo via Phil DeFranco on Instagram.

12 Responses to “Why big media is buying YouTube stars — and who could be next”

  1. Walter

    YouTubers that are struggling who use to be on top are a MUCH better investment in my opinion.


    Because the only reason these people know how to grow their audiences AND make great content. The only reason they’re not on top anymore is because they weren’t lucky enough to get YouTube’s special funding. Most of this money went into promotional stuff, buying ads to assure that these channels would be seen more. Instead, these struggling YouTubers are having to go out of their way and do things they wouldn’t normally do just to survive but that’s just going to sit well with their audiences for much longer.

    Take smpfilms for example. He has been in the top 10 most subscribed with a quarter billion views but now he can barely rake in 30k hits. He’s more active today than he has ever been but I don’t think he will be for much longer if nothing is done.

    These companies need to realize that YouTube is a gold mine just waiting to be explored. Maker Studios, Fullscreen, Big Frame and Alloy Digital are barely scratching the surface of what could be the biggest thing to happen to the entertainment industry but their business models don’t do anything for the content creators. Many YouTubes signed under them will probably die as well without proper funding.

  2. Lydia

    I know that Kaleb Nation has a reality TV show in development about his life as a Youtuber directed by the producer of Twilight, so he’s another one moving to TV.

  3. The first company to identify Webstars and monetize them is HITVIEWS. Starting in 2007 we have worked with stars such as DeFranco and Turner for brands like FOX and PEPSI. The key is to understand their relationship with their audience and not interfere. Happy to advise any company on how to do this without complete embarrassment.

    Walter Sabo
    HITVIEWS 917 806 3386

    • Not Philip DeFranco

      As someone who is definitely not Philip DeFranco I would recommend against this. ;) The real test to is this advice I should take is what happens if you go to

  4. Traviz Mercer

    as long as we don’t see any Call of Doody dweebs getting jobs like this, all will be right with the world. because anybody can sit on their behind and play an insignificant franchise to please 12 year old social degenerate nerds.

    • iN-VaLiiD

      they will. gaming company’s are probably gonna be interested into looking for a community manager from Youtube. more promotion of their own game + they wouldn’t have to train them. because they are VERY instrested in people who have built their channel up to a significant following cause lemme put it this way. if you want to hire someone for the promotion side of a product and you got two applications who would you hire, a guy whose looking for his first ever marketing job or a guy who has a 500,000 subscriber youtube channel by himself all on his own. you would take the guy who has the 500k youtube channel cause thats 500k people right there that you market to. so people who have there channel grown off of gaming videos will get pieces of this like syndicate and Whiteboy7thst. those are 2million + subscriber channels.