Danny Zappin And Maker Studios Controversy Get the Hollywood Reporter Treatment

So the Hollywood Reporter is shaking the Maker tree, controversy style. In their print edition released on Oct. 22, reporter Eriq Gardner profiles the backstory of Maker’s inception and subsequent transition into an up and coming potential Hollywood/media powerhouse. But the article also delves into the yin and yang nature of the company, first under the helm of former CEO Danny Zappin (full disclosure: a current NMR investor) and now with Ynon Kreiz steering the ship. Titled, “The War for YouTube’s Top Studio,” it details the tempestuous period of Maker’s extreme growth in a short amount of time, and posits the question: Is Kreiz responsible for the continuing success of Maker, or did Zappin build a solid foundation that inherently generates its own success? “There’s no gatekeeper,” says Zappin via the Reporter article. “You can create whatever content you want. And if you understand how the site (YouTube) works — which I really studied and learned extremely well — you can drive audience.”

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Gardner points out the troubling numbers that currently hurt YouTube’s MCN’s (multi-channel networks) though: “If Maker is going to be as big a business as, say, Breaking Bad network AMC, it must improve its returns. One way to do this is to increase the RPM (revenue per thousand views) rate. That might happen if ad buyers begin to price digital viewership closer to the way they value television eyeballs. Kreiz insists that it only is a matter of time before “parity” is reached, and the company now has 15 ad sales professionals intent on getting better RPM rates on channels like Epic Rap Battles. Maker also is able to negotiate brand-integration deals that don’t require any sharing with YouTube.” Currently a studio like Maker pulls down $1-3 per RPM and a portion of that gets chopped off for YouTube, and then a substantial portion of the rest goes back to the talent (as it should), with Maker taking a slice for handling promotion and production costs.

But doubters theorize the very need for MCNs — soon YouTube will get its act together and start dealing with the talent directly, which seems to be coming gradually through steps such as opening up their worldwide collective of YouTube Creator Labs. Then again, Maker has acquired a content site of its own in Blip. And while the future is far from known, the present looks rosy no matter who pilots the house that Danny built.

Via Gardner: Despite these issues, the company maintains that its growth trajectory is on target. Although Maker won’t provide exact numbers, (Maker investor Mark) Suster says that annual revenue is north of $100 million. “We are progressing ahead of track,” adds Kreiz. “We have tripled our revenue last year and expect to triple again this year. Many companies that operate on the web don’t have revenues at all.”

There’s no business like show business.

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