Digital Dealings

6:00 AM PST 01/10/2012 by THR Staff

How to get famous on YouTube, and a look at one man's yoga-bashing journey from Whole Foods to Madison Ave.

♦♦♦♦♦

HOW TO GET FAMOUS ON YOUTUBE: Maker Studios seeks prospective Internet stars and gives them a stage

A cursory viewing of any number of viral videos -- with their irreverent tone, ramshackle aesthetics and simple approach to narrative -- might give the impression that fame in the digital video world largely rests on luck. But the founders of Maker Studios, a Culver City digital production company that is home to several YouTube stars, say that lasting online stardom is serious business.

"When I am meeting talent, the first thing I want to know is, how committed are they to it?" says Lisa Donovan, who co-founded Maker in July 2009 with CEO Danny Zappin. Zappin says that when mainstream talent tries to cross over on YouTube for self-serving reasons, audiences see through it, whereas with successful YouTube personalities, viewers "feel like they are talking to normal people." Success on the video-sharing website requires dedication, says Donovan, along with a willingness to show a personal side that some might be loath to reveal. "Do you understand you have to engage with your audience?" she says. "This isn't TV and this isn't film."

But hitting it big online can lead to work in those mediums. Donovan would know: She parlayed her success on YouTube -- where her channel, under the moniker LisaNova, has received 200 million views -- into a stint on Fox's MADtv in 2007. Other Internet video sensations to cross over include Justine Ezarik (known as iJustine), who has appeared on Law & Order: SVU and Criminal Minds, and Kevin Wu (KevJumba), who was a contestant on the 17th cycle of CBS' The Amazing Race. Maker has 200 employees and operates a full-service studio that its stable of YouTube personalities uses to shoot videos. It's a straightforward business model: Talent has access to nearly everything needed to make those clips -- from extras to costumes -- and in exchange, Maker takes a portion of the ad revenue they generate.

The company declines to discuss financials, but COO Courtney Holt stresses that Maker is "very friendly with talent; we try to be transparent with them. We make money in building out these brands." Maker is home to several notable YouTube personalities, including comedian Peter Shukoff, who posts clips under the name NicePeter that pair historical figures in absurdist rap battles (think: Darth Vader vs. Adolf Hitler). Shukoff's clips have been viewed 343 million times. Another, Ray William Johnson, best known for Equals Three, a series that offers commentary on viral videos, has 5.1 million subscribers, the most of any YouTube personality.

In October, YouTube, a subsidiary of Google, announced that as part of its $100 million slate of new programming, Maker had secured three new channels, including recently launched Tutele (bilingual cultural programming) and The Mom's View. As the website evolves, Zappin believes it will morph into a hybrid of television and the Internet. But ultimately, success in the realm still will require forging a deep connection with audiences. "A lot of traditional people will look at YouTube and the people that are successful and won't see that as talent," he says, before emphasizing, "But we are looking for talented people." -- Daniel Miller

♦♦

VIRAL VIDEOS: From Whole Foods Parking Lot to Madison Ave.

Mocking L.A. life's mundanities has become David Wittman's calling card. The film and commercial music scorer made a name for himself last summer when his cheeky DIY video "Whole Foods Parking Lot" went viral (sample rhyme: "I'm riding slow in my Prius/All-leather, tinted windows, you can't see us/Everybody's trying to park you can feel the tension/I'm in electric mode, can't even hear the engine"). He recently debuted a follow-up called "Yoga Girl," also shot partly guerrilla-style in heavily trafficked locations such as Urth Caffe, in which he raps, "Your aura's glowin' your tarea steady flowin'/I signed you up for my newsletter without you knowin'." Why another jab at yuppiedom? "The yoga folks are a trip," Wittman, 37, tells THR. "They're these caffeinated rich girls showing up in BMWs, finishing their lattes, double-parking, being mean on their cell phones -- then they run into this yoga class and all of a sudden they're centered and spiritual. It's basically the irony of Westside culture."

And now the East is calling, with Madison Avenue enlisting the Bay Area native and his Fog and Smog collective to write and star in a Hyundai ad -- though he's not giving up his day job just yet. "The idea is, let's do something where there are no boundaries, and we can really collectivize and see what comes of it -- that's the path we're on," he says. "It's an amazing time because with YouTube you can get stuff out and connect quickly, but it's also a slippery slope because if you turn it into a job, then it may lose some of what makes it fun." -- Shirley Halperin

♦♦

ANIMATING CURRENT EVENTS: Are those wacky videos from Taiwan's Next Media the future of news?

Tiger Woods crashes his car as his wife chases him with a golf club. Beyonce gives birth to her first child in a New York hospital. It's the big story of the day, except there's no video footage … until suddenly an animated 3D clip pops up and becomes a viral sensation.

These are the brainchild of Jimmy Lai, 62, the Hong Kong and Taiwanese tabloid king (think a more fun, more charming but less political Rupert Murdoch) who runs Next Media. Lai had the idea in 2007, but it took two years and $30 million to develop a proprietary system that could render simple animation in minutes (versus hours for Pixar's cinema-quality animation).

Launched in November 2009, Next struck gold when its Woods video went viral that month, scoring more than 2.5 million views on YouTube. Other winners include Charlie Sheen's Plaza Hotel meltdown and a piece on passengers with "airport rage" from invasive security checks. Next's clunky 3D animation might bear only a passing resemblance to the real people and places, but the style has become so recognizable it has been parodied on everything from Parks and Recreation to The Good Wife and copied by established networks to visualize things like drone attacks on al-Qaida terrorists.

While the animation looks simple, Next Media is a lean and sophisticated operation, going from concept to finished product in just a few hours. Next produces 10 to 15 minutes of animation a day, an astonishing number by the standards of film and TV production.

Popularity came quickly for Next, but profits have proved elusive. In fact, when the Woods video hit big, Lai hadn't yet figured out what to charge news outlets for usage, coming up with $300 on the spur of the moment. Next makes some money on advertising and by creating the occasional custom videos, but the revenue doesn't come close to offsetting expenses.

Lai's answer is to grow first and worry about profits second. In November, he established a beachhead in the U.S. with Big Apple Daily, a New York City-centric site staffed by two local editors, and added News Direct, which offers straightforward news animation as an alternative to the sensational fare on the main channel. The early response has been so-so. A couple of videos have scored more than 20,000 views, but many have languished, recording just a few hundred views on YouTube.

This gets to the heart of Next Media's dilemma: Generating viral hits for sensational stories hasn't translated into a steady audience. For Next to become a profit center, Lai needs to figure out a way to turn a novelty into a regular destination.

Still, Lai thinks he's hit on the future. "This is like watching a video game," he says. "But it's the news!" -- Andy Lewis

♦♦

DIGITAL DOMAIN: The firms work on everything from branded content to viral comedy videos for their clients.

CAA: While CAA works on digital content distribution, social media management and branded entertainment for its clients, the company has a unique focus: incubating digital startups. Michael Yanover, head of business development for the agency, says that while the companies CAA has incubated have been built with an eye toward profit, there has been a "dual benefit of providing a service to many clients and nonclients." He says Creative Mobile Labs, which launched in 2011, fits that bill in this respect: The firm brings Hollywood talent together with application developers to create content for mobile platforms. "It is actually providing something to our clients that didn't exist before," says Yanover, who oversees a team of about 10 people. The company also has incubated WhoSay, a social media service for celebrities and influencers, and Funny or Die, the ubiquitous humor website. In each case, CAA has a stake in the company as a founder. 

ICM: At ICM, the goal is "to take our clients' artistry and find new avenues for it -- and hopefully new monetizable avenues," says George Ruiz, senior vp business affairs and head of new media at the agency. He is ICM's sole agent dedicated to the digital realm on a full-time basis, though about 20 agents from various disciplines also work in the space. Ruiz has worked with some of his traditional acting clients, including Felicia Day, to broaden the scope of their digital projects. Day, for example, is the creator, writer and star of The Guild, an award-winning web series that was started in 2007 and centers on a group of online gamers. Along the way, Ruiz has cut deals for the series with Netflix and Hulu, and it can be seen on Xbox Live, iTunes, YouTube and Amazon. There's also a comic book from Darkhorse Comics. "Every project has its own needs, but we really like to approach this where digital is the starting point, and we can take it other places," Ruiz says.

Paradigm: Paradigm did away with a formal digital department in 2009 because the digital arena "is a huge panorama -- you couldn't have three or four people who are focused on the entire client list," says Andrew Ruf, head of the agency's finance department. He says every agent is expected to be conversant in the digital realm, serving clients' social media, licensing and distribution needs. For agency client Katherine Heigl, that meant helping develop "Katherine Heigl Hates Balls," an irreverent public service video about neutering dogs that debuted on Funny or Die in November and racked up nearly 1 million views. Paradigm represents Alliance Entertainment, a distributor of music and movies that is co-owned by Platinum Equity and the Gores Group, the respective investment firms of Tom Gores and Alec Gores, brothers of Paradigm CEO Sam Gores. The agency is helping Alliance transition into digital distribution; the company will look to acquire original content.

UTA: UTA lays claim to a handful of firsts: It was the first major agency to form an online entertainment division (2006) and a social media practice (2011). Brent Weinstein, head of UTA's digital media department, says the company's willingness to stake out territory ahead of competitors sets it apart. "The agency has always been very innovative and very aggressive about being leaders in the digital space, even when it wasn't necessarily in vogue and when other companies were taking a more conservative wait-and-see approach," says Weinstein, who oversaw formation of the online entertainment division before decamping for a two-year stint at 60Frames Entertainment, the web video startup UTA incubated (he returned to UTA when 60Frames folded in 2009). UTA's digital department has six agents including Ophir Lupu, who joined the company in November after departing CAA, where he was co-head of the video game department.

WME: SuzAnn Brantner heads WME's digital division, overseeing a department that includes six people and takes a full-service approach to all things digital: "We are a digital source for every client and every department." Her department's work ranges from securing buyers for digital content to finding distribution for material that has been produced. For former agency client Lisa Kudrow, that meant cutting a deal with Lexus-owned branded entertainment website LStudio.com to screen the actress' improvised comedy web series, Web Therapy. The Webby award-winning series, which launched in 2008, was later aired on Showtime -- a deal the agency also cut. "Branded entertainment is becoming an incredible growth engine for high-quality digital content," says Brantner. WME also has secured funding for clients such as Amy Poehler, who have cut deals with YouTube as part of its
new original channel push. -- Daniel Miller

♦♦

VIDEO GAMES: The Shooting Stars

Technically, the first video game appeared during the Truman administration -- a dot on a screen that players aimed at targets. Today the sophisticated industry is transitioning rapidly from packaged goods to digital downloads, and PricewaterhouseCoopers predicts revenue will surpass $82 billion worldwide in 2015.

"Probably 45 out of 52 weekends a year, a video game outgrosses the No. 1 movie," says John Riccitiello, the 51-year-old CEO of Electronic Arts. The company's Madden NFL franchise alone has generated north of $3 billion.

"I thought by now we'd have evolved into more of a storytelling medium," says Bobby Kotick, 48, CEO of Activision Blizzard. "But what really propelled us is the social and interactive components. I expect that to change during the next five years as big-name movie directors and screenwriters embrace video games as actors already have."

Activision's Call of Duty franchise is approaching $5 billion in global sales, about twice the worldwide box office generated by the Spider-Man movie franchise.

Perhaps no one understands the nexus of Hollywood and video games better than Strauss Zelnick, former president and COO of 20th Century Fox and now CEO of Take-Two Interactive Software, home of Grand Theft Auto, which has sold 114 million units worldwide.

"The structure of the video-game industry is similar to the movie business in the 1940s, with talent on staff. It's very interesting," says Zelnick, 54. "I don't believe for a moment that console video games will go away, just as I don't think tentpole films will go away." -- Paul Bond

♦♦

CHINA'S FORWARD THINKERS: Four visionaries who are shaping the Asian nation's digital future

Charles Chao
CEO, Sina

He made weibo (way-bwah), China's Twitter-like micro-blogs, the web's biggest buzzword in 2011. A journalist-turned-tech tycoon, Chao, 45, led Sina to become the country's most influential social networking service with 230 million users and counting. A power tool of civilian journalism and social accountability, Sina users shame government cover-ups and interact with their favorite celebs. 

Han Han
Super blogger/Internet voice of a generation

He races cars, sells books by the tens of millions and releases rock songs. The most-read blogger in the world, with well over 300 million hits, Han, 29, is hailed as the voice of a generation. A subtle critic of the suppression of artistic freedom, particularly in the realm of film, he is closely followed in times of political unrest.

Victor Koo
CEO, Youku

A Stanford Business School grad, Koo, 45, founded Youku, the YouTube of China, which boasts more than 200 million visitors. He recently signed deals with Warner Bros. and DreamWorks to bring Hollywood films like Kung Fu Panda to the site and is developing original content and a paid premium on-demand service.

Robin Li
Co-founder and CEO, Baidu

Li, 43, runs Baidu, China's state-endorsed search engine, which sees some 500 million daily users. The country's second-richest man, worth $9.2 billion according to Forbes, he has made bold forays in recent years, including the financing of iQiyi.com, China's first Hulu clone. In November, iQiyi partnered with Paramount to secure exclusive digital rights to Transformers: Dark of the Moon -- a promising milestone for legitimate Internet distribution in China. 

♦♦

MUSIC'S DIGITAL PLAYERS: These five industry innovators prove the  future is now -- and it isn't free

Rio Caraeff
CEO, Vevo

Early MTV music makers couldn't monetize costly videos, but Vevo was a game changer, producing ad revenue for YouTube clips; it has paid out $100 million to artists and labels since its 2009 launch. Sony, UMG and EMI have a stake, and Caraeff, 36, has seen viewers double to 63 million uniques as Vevo delves into live events, original programming and Xbox integration. 

Daniel Ek
CEO, Spotify

Sell songs to a public used to getting music for free? At 28, Ek, the Swede who founded cloud-based streaming service Spotify, proved it was possible. His 3-year-old, $2 billion company now accounts for half of all music sold in Sweden and boasts 2.5 million paying customers globally. It launched in the U.S. in 2011 with Facebook and all four major labels signed on.

Andrew Fisher
CEO, Shazam

Since its 2002 launch, Shazam has helped more than 175 million users instantly identify 1 billion songs and spend $100 million on digital music. Under Fisher, 42, the service expanded to television, where "tagging" the screen will bring up credits, brand info and bonus content. NBCUniversal
and Super Bowl advertisers are on board. Next up: a Shazam player.

Zahavah Levine
Director of content partnerships, Android

A well-known player in the litigious world of licensing as the former chief counsel for YouTube, Levine, 43, is now applying her "pitbull" negotiating skills to business development at Google Music (launched in fall 2011), where she deals with the music industry. So far, Universal Music, Sony, EMI and such prominent indie labels as Merge, Matador and XL have signed on.

Tim Westergren
Co-founder, Pandora

In Internet radio, Westergren, 46, defines forward-thinking. He launched Pandora 11 years ago, and today, some 125 million users spend an average of 18 hours a month tuned into its radio stations on more than 450 devices, good for 68 percent market share. Those numbers bolster the company's valuation of more than $2.6 billion and put it in competition with terrestrial broadcast giants.

 

comments powered by Disqus