Media Expert: How YouTube Is Evolving Its Channels

The brand is using strong fan bases to create powerful entertainment outlets.

This article titled “Larry Shapiro: ‘YouTubers are taking control of their own destiny’” was written by Stuart Dredge, for The Guardian on Saturday 7th June 2014 17.14 UTC

YouTube multi-channel networks (MCNs) are big business, at least judging by the up to $950m that Disney has agreed to pay for one of the leading examples, Maker Studios. Next to go may be Fullscreen, another US-based MCN reportedly targeted by Hollywood studio Relativity Media in a deal worth between $750m and $1bn, depending on which report you read.

Larry Shapiro is Fullscreen’s senior vice president and head of talent, charged with overseeing the company’s stable of established YouTube stars and emerging names alike. “I really believe there’s a tipping point that’s happening right now, where you see studios, networks and advertisers all starting to look at these creators and what’s happening,” says Shapiro. “For me, that’s what’s really exciting.”

Shapiro compares YouTube in 2014 to music videos in the 1980s: a new medium initially loved by teenagers, acting as a proving ground for talent that would later move on to bigger things. He cites Loverboy’s Notorious as a prime example. “Those kids, 20-25 years later, they’re all adults, they come home and sit down to watch House of Cards on Netflix. Well, that Loverboy video was directed by David Fincher, and House of Cards was produced by … David Fincher,” he says.

“20 years from now, this generation is not going to be watching movies by Jerry Bruckheimer or even David Fincher. They’re going to be watching TV shows produced by Shane Dawson, starring Andrea Russett. These creators are tapping into the emotional growth of this generation: they’re weaved into their emotional DNA now.”

Shapiro says he already sees this happening in music, where two more Fullscreen clients, Jack Johnson and Jack Gilinsky, known as Jack and Jack, have broken into iTunes’ top 20 urban songs chart several times. Fullscreen was sued by US music publishers body the NMPA in August 2013 for not paying royalties to songwriters for cover versions by its creators, although it reached a settlement in January this year.

The Los Angeles-based company has a network of more than 40,000 YouTube channels, including big names like Grace Helbig, The Fine Brothers, Lindsey Stirling and Devin Super Tramp. That network generates 3bn video views a month, with more than 365 million subscribers on YouTube. As a comparison, Maker Studios claimed 5.5bn monthly views and 380 million subscribers when its Disney deal was announced in March.

The likes of Helbig (1.8 million subscribers on YouTube), Devin Super Tramp (2 million) and The Fine Brothers (8.4 million) are increasingly attractive partners for big brands, although on their own terms, making videos that may be funded or sponsored by blue-chip advertisers, but which are made with a firm focus on not annoying their fans.

“Building that relationship directly with your audience is not just about getting the Twitter followers and the comments going,” says Shapiro. “It’s about the relationship. What Madison Avenue and all of traditional media has yet to understand about this is that there is this authentic bond between these creators and their fans. Their fans represent their distribution channel: it’s a living, breathing organism, which I don’t think traditional media understands, nor do they really understand the power of that. The fans helped build their distribution channel: they told their friends to subscribe, to retweet something. They’re part of this whole process.”

Shapiro sees his role at Fullscreen as “building the next generation of entertainment talent” which the company splits into three distinct tiers. Tier one is the big stars, while tier two is the emerging talent identified by its A&R department (“they literally are like music A&Rs, looking for nuggets of gold to sign into the network”). Finally, tier three is the rest of the 40,000-plus channels in Fullscreen’s network, for which the company makes software and services to help them improve their videos and grow their audience.

Shapiro thinks traditional media executives often underestimate the work being put in by YouTubers. “It’s a job for these creators. They wake up Monday and start reading what’s trending and figuring out what they’re going to shoot. They’re prepping Tuesday, shooting Wednesday, editing Thursday and uploading Friday,” he says. “What do they do on Saturday? They’re reading the comments and answering back. This connected generation is a do-it-yourself generation: these guys have seen economies collapse, they’ve seen their parents’ fortunes wiped out, beyond their control, but they’re now taking control of their own destiny.”

He sees the current generation of YouTubers spawning the next generation of mainstream entertainment stars. “It’s really a different world. Does Brad Pitt know anything about YouTube? Of course not! [YouTube star] Connor Franta knows everything about YouTube, and social media,” he says. “That’s why someone like Connor Franta is going to be one of the most important celebrities in the next 10-15 years. He knows this space, and he has a team behind him that understands the technology and the analytics: that perfect combination of pixie dust and data.”

Shapiro points to the past to explain why cover versions abound on YouTube. “Bands in the 60s and 70s who were just breaking, they played covers too: the Beatles used to play Chuck Berry, right?” he says. “Please Mr Postman was a Motown song, but the Beatles sang it. It’s about building an audience. These YouTube creators know how to work audience development and the system.”

A major part of Shapiro’s job is working with the brands who are investing in sponsoring these young creators’ work. It can be tough, he points out, for advertisers to shift their expectations. “The brands who are doing it right are funnelling their money through digital executives who grew up in this space.”

He tells the tale of Ford execs meeting one of the cameramen shooting a Devin Graham series of branded stunts. “You can imagine: Ford is used to having the biggest Hollywood DPs [directors of photography] shoot their commercials, and this kid shoots wedding videos,” he says. “Panic came across their faces, but they trusted us. And when we released the first video and it got half a million views in the first day, they rang me up and said ‘I don’t care where you get our shooters from’. It’s a different production mentality, and that’s the cool thing.”

Shapiro warns that this still isn’t always the response, suggesting that when brands impose their own production values or processes onto sponsored content made by YouTube creators, the results often spark a backlash from fans. Convincing them of this is one of the key tasks of an MCN in 2014. “We’re able to manage the expectations of clients: I say ‘you’re not going to have your fruit smoothies and 20 director’s chairs on the shoot. You’re going to have to help carry camera cases, and you’ll be lucky if the burritos for lunch are warm.’”

Curriculum vitae

Age 45

Education University of Michigan, NYU – Tisch School of the Arts

Career 1992 joins Palomar Pictures to produce TV shows and films. 1996 VP/GM at games firm Stromio Entertainment 2000 agent, Creative Artists Agency (CAA) 2007 chief creative officer, Brash Entertainment 2008 president, Oddworld Inhabitants 2009 co-founder, Xmobb 2011 EVP of business development, Fourth Wall Studios 2013 joins Fullscreen.

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