VidCon is the world’s largest online video conference not only because it’s an event where YouTube’s biggest fans gather and meet their favorite creators, but also because it provides a venue where people connected to the online video industry can seek talent and gather new ideas. Mike Bienstock, CEO of Semaphore Financial Solutions, sees VidCon as beneficial for YouTubers to get the support they need to create good content and generate more revenue. He represents many YouTubers with their financial services, including Philip DeFranco. In May, he helped advise DeFranco in his deal with Revision3, who acquired his YouTube channels and named him as part of their programming team.
NMR spoke with Bienstock last weekend at VidCon, where he gave his thoughts on how content creators should focus on their brand as a way of generating more revenue and how VidCon is important for both content creators and business people.
What do you envision for YouTube in the future?
Mike Bienstock: I think they’re going to keep experimenting with the model, but I don’t see massive changes in the short-term. I think it’s expensive to have a competing platform, and I don’t really see anybody with the resources like Amazon or Netflix or any of those big creators getting into the space as soon as the content creators hope. Everybody’s hoping for some quick entry that pays more money, and I just don’t see it in the short term.
How could content creators make their business lucrative now that there’s so many people in that field?
Creators need to take more control and ownership of their brand. Instead of just seeing themselves as content creators — they’re effectively producers selling a clip of video in its most basic sense. It’s going to have to expand into real relationships they have with their clients and their fans, and they’re going to have to think of a way for everybody to benefit, to have the fans benefit and to help them monetize in that respect. If they’re not making any money, they’re not making content anymore, so that’s the dilemma that I’m going to see coming up.
Some creators are trying to experiment with the YouTube paid subscription model as a way to generate more revenue. Now a few months in, some creators who have taken the plunge are disappointed with their results. Do you think growth will be slow with paid subscriptions?
We’re trying to ask people to basically change their behavior. They’ve been used to getting something complimentary for a long time and all of a sudden they’re being asked to pay for it. Any time you do that, there’s pushback. What we’ll likely see that will work better is that there’s an extension of a particular piece of content and maybe some different direction a creator takes. If you make them pay for something that was always free, that’s incredibly difficult, but if you create something new that they’ve always had to pay for, you have a better time.
Channels like The Young Turks have launched paid subscription models that focus on separate content like behind-the-scenes videos while keeping their main channels free. What do you think of that idea?
I think that’s going to be a difficult proposition. Perhaps if they were to create and curate this audience and launch a product with a similar theme or a similar characteristic, that would be the future. The thing that Netflix is doing that’s quite genius is when they did “House of Cards” they did some research based on what their viewers were watching, and they designed “House of Cards” based on what their audience watches from these other kind of movies. It’s kind of the recommends feature. They’re taking it to a whole other level, and they’re basically saying, “What do people want to see?” They’re getting some themes with that and they’re going and creating content based on those themes. It’s actually quite genius because they’re launching something that has an audience that’s predisposed to that content and I don’t know anyone else that’s doing something like Netflix.
What else can content creators do to make a living off of YouTube?
What we’re seeing is creators taking a more serious role about taking that next step with their brand and engaging their audience. We’re seeing the fashion and beauty YouTubers coming out with their own fashion lines, they’re trying to come up with their own cosmetic lines. They’re trying to brand to them. It’s not just slapping a label with a licensing deal; they’re literally creating things, and I really think that’s where it’s going to go. You have something special; it’s literally a brand, and you can actually keep a strong engagement with your audience because they’re using your products that you created. I really believe that’s a big direction that we’re going to see. And truthfully, this VidCon situation where we’ve exploded in attendance in terms of the number of industry people here, I think that’s actually good for the creators because it’s actually building an ecosystem of support for creators to do this type of stuff. So I think we’re going to see a lot more projects, and Smosh has their magazine. I think we’re going to see a lot of line extensions.
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