How to Turn YouTube Clicks Into Cash
Talent agencies are throwing out the old set of rules to nurture new online stars, reports Rebecca Burn-Callander
You have a million subscribers to your YouTube channel, you are uploading videos every week that are instant viral hits. So how do you make a living from your online popularity?
No one would have asked this question a decade ago, but as YouTube celebrates its 10th birthday, a whole new industry has sprung up around the video platform looking to monetise its emerging talent.
Most of the agencies dedicated to “vloggers” (video bloggers) are start-ups, because the scene is still in its infancy. The oldest, Gleam Futures, was started by Dominic Smales in 2010, while online talent management companies, Flipside and Popshack, were set up last September.
They are performing a vital function in this nascent industry: connecting YouTubers to publishers, TV networks and radio channels. They also professionalise these YouTube stars, who frequently have a reputation for being hard to get hold of. Many are teenagers who uploaded videos from their bedrooms and had no idea they would become stars. “Often they are alarmed and their parents are alarmed,” says Conrad Withey, founder of Popshack, which specialises in finding and promoting emerging pop music talent.
“They’re at home and alone and slightly surprised when they put music out there and lots of people like it.”
Withey, former president of Warner Music Entertainment, founded Popshack after seeing traditional publishers and record companies struggling to deal with the new breed of music artist. “I thought that there should be a new kind of business discovering that talent and taking them on that journey.”
He recently brokered a deal between Dominos and R&B artist Daniel J, where fans vied to have Daniel J deliver a pizza to their house and do a gig in their living room. “The old rules have been thrown out,” says Withey. “We’re beating our growth targets by three times.”
Many YouTube stars have become household names: Zoella (8.4m YouTube subscribers) has published a best-selling book, while duo Dan Is Not On Fire (4.8m subscribers) and Amazing Phil (2.6m) are due to release a novel later this year. They have also sold out a UK tour.
YouTube stars have become one of the few ways to reach younger consumers. A survey by Variety found that the five most influential figures among Americans aged 13-18 were YouTube stars, eclipsing mainstream celebrities including Jennifer Lawrence and Seth Rogen.
“Young people don’t sit in front of the TV for hours, they sit in front of a laptop for hours,” says Dan Is Not On Fire, aka Dan Howell, a 24-year-old YouTuber with an estimated net worth of pounds 2m. “Media companies have to adapt or die, like Blockbuster Video.”
The key isn’t to replicate the old talent agency model, where unknowns are signed and turned into stars, but to embrace an upside down model instead.
“You can find fame and success completely by yourself,” says Fleur Brooklin Smith, who co-runs Flipside, which is owned by the Endemol Shine Group, the company behind Big Brother. “The idea that people will send demo tapes into record companies and hope to get discovered is over,” adds Withey.
Middlemen agencies have sprung up because of demand from the YouTubers as well as the requirement for a professionalisation of the industry. “There’s been a Wild West feel to managing online talent,” says Brooklin Smith. “A lot of the people we talk to about signing up have been stitched up and are quite cautious.”
It’s a tough business for agency start-ups. Managing online talent comes with unprecedented levels of scrutiny. If you broker a deal with a brand, and fans don’t like the results, they will take to social media in droves to complain.
These modern agencies have to make decisions that are broadly ethical, or risk invoking the wrath of millions.
Product placement is also frowned upon. Audiences can spot an attempt to plug a product in seconds. “You can’t just hold up a product and smile,” says Mike Cook, the other Flipside boss. “You have to entertain so that even if the audience isn’t interested in buying the product, they will enjoy the message.”
“YouTube will hate me for saying this but we’ll do less work with brands next year and even less the year after,” says Smales. “The deals will be better and more credible when we do work with brands.”
It’s a brave new world, adds Smales. “YouTube has given birth to a medium for creative people to create stuff that isn’t controlled by gatekeepers like publishers or network bosses. People who grow their audiences will overtake manufactured talent. In five to 10 years’ time, everything will be completely different.”