What do you guys think about the network system that is popping up around YouTube?
Niko: The network system on YouTube can be helpful, and it can really be great for people who are trying to start off and make a living and get off the ground. But there is a very deep problem in it, and that is pretty much everybody that goes out and says, “Hey join our network,” they promise that they’ll provide certain amounts of support and they’ll try to help you grow your channel, that there is a team of other channels there that can work with you — and that is true to some degree — but once you start signing on more than just 10 channels into a network — and every network has more than 10 channels now — there is no way you can work with all those people in any kind of close manner. If you signed on a thousand channels to your network, everybody’s been signed on with the promise that this network is there to support them, but if a thousand people need just a five-minute call with the person managing them at the network, there is not enough time in a week to call a thousand different channels and manage all that — there is no way to keep track of that. So what ends up happening is that people get into a network, and they were promised support but they don’t have it, and they’re just sitting there in a network and it’s great ‘cause they’re getting higher CPMs ideally for their stuff, and they’ve gotten a partnership, though in these days you don’t necessarily need a network for that anymore. You’re getting in this bloat that’s happening with networks, and I don’t think it’s as viable as people initially thought it to be.
Sam: I think it’s because networks kind of have a lot of crossover into different areas: networks/management. And I think the problem is that the moment you’re calling yourself a network you have a kind of like conflict of interest with the actual content creator, because for the content creator you want the support that you need as a channel, but as the network, what you need is not this one channel, as you want as many channels as you possibly can get, and every single channel you add on makes the experience for each individual channel lesser, so you’re basically trying to figure out, “Okay, what is the balance where we can keep things productive?” and maybe it is just my inexperience, but I’ve not seen a network yet who has quite been able to find that balance. Typically it results in the network just signing everything they can, trying to get as many numbers under their ad network as possible, and yeah, I don’t know. I guess we’ll see how it goes in the future. I mean I’m not going to say we’re in a bad position by any means, but yeah.
Niko: I think it kind of comes back to the ad revenue on YouTube issue. One of the disadvantages on YouTube is it’s very hard to make money with your views, and the idea with these networks was that they would be able to increase this ad revenue, and everybody seemed on board with that, but it’s not really been happening, and I honestly think it is something that is just going to naturally happen through time and through infrastructure, and it depends upon the entire world to slowly mature in its internet usage for it to really become a thing, but these networks are now in this tricky situation where these CPMs as focused on getting this ad revenue up, has not been happening.
Sam: It kind of also comes back then to how do you make a living on YouTube and how do you increase the value of the internet video? And there are so many ways to do that, like YouTube is basically funding videos, they fund premium content, they’re funding premium channels which I mean we have; we’re blessed to be recipients and involved in some of those types of projects, but at the end of the day that is totally like artificial inflation, you know, that is like Ford buying its own cars and telling people that sales are up, so that is one way to do it. For everyone else, they’ll see better videos and think, “Oh premium content, great, worth more money.” For the networks’ perspective, I mean I don’t know, I guess it is just a matter of figuring out how to take advertising and take these clients and figure out how to sell them so that it has that value. We see where that value is — you’re communicating directly with people, you’re telling them exactly what your message is, and I think for any marketer that’s great, but it’s just a matter of communicating that over time because it’s a changing industry.
Super insightful. How do you guys feel about approaching the two million-mark so quickly?
Sam: Great! [laughs] Sweet! It’s great because the last year it’s kind of snowballing a little bit, ‘cause basically we worked for about a year and a half on the channel, got around like 800,000 subscribers, and then between like in the last like 10 months we’re already more than double of that, so it’s like even though it’s not picking up super fast, it’s actually growing exponentially on a very low level for us.
Niko: I remember way back when — I don’t know if we had our channel yet; we probably had our channel launched, and Freddie and Brandon were in the first year of their stuff — Joe Penna, Mystery Guitar Man, came over and Freddie and Brandon helped him with a video, and for us, oh this is Mystery Guitar Man — this is one of the people on YouTube. He didn’t even have 2 million subscribers at the time, but he was certainly one of the big public figures on YouTube, I mean he still is. I remember very shortly after he crossed the 2 million mark, and I remember reading the tweets and the post and him thanking people, making a video about it, like man, 2 million, this guy who has been a figurehead of YouTube has been doing it for so long finally crossed 2 million — that’s cool, that’s such a big milestone. And here we are today crossing 2 million, and I can look back to two years ago and thinking about that experience, it’s interesting to finally be there.
Sam: But also kind of tells you about YouTube as well, because we’re crossing that mark but we’re not even in the top 100 subscribed channels [laughs]. It’s been getting competitive because we were actually for mostly all of last year–
Niko: We were in the top 100.
Sam: We’re in the top 100 last year, but there was so many new channels and stuff like that, and it’s very difficult to keep your subscriber numbers up, so I think like last year we were very focused on subscriber-based stuff where we were so worried about this subscriber and ranking and stuff like this, but this year it’s kind of like, eh, you’re ranked but the only thing that matters is like if people are liking the videos you’re making and if you’re enjoying what you’re doing.
Niko: It doesn’t matter if you’re the lowest subscribed channel on YouTube if every video you make gets views and people like it. That’s really what it comes down to. It’s not as competitive as television because you’re not in a time slot against another show, and it’s like which one am I going to watch? I can only pick one. With YouTube it’s like, “That’s a cool video, that’s another cool video, I’m going to watch that video now,” and you’re not really competing with other people–
Sam: Also subscriber numbers I think are a little overrated frankly, like even it happens today like, “Oh we have so many subscribers,” but it’s like not even any of them consistently watch our videos. Like we have 2 million subscribers, but you know when we put a video out it’s not like they all see it or they all go and watch it.
Niko: We don’t get 2 million views.
Sam: We don’t get 2 million views in the first day or first week, so it’s not like they don’t have value, but it doesn’t determine the success of your videos or your channel.
Niko: It helps. It’s a factor, but it is not the deciding factor.
Sam: It’s not going to make or break it.