Why Jason Calacanis Is Wrong About YouTube

2014-10-31 06:17:01
Why Jason Calacanis Is Wrong About YouTube
Friday, October 31, 2014, 6:17:04 AM

YouTube

YouTube

Jason Calacanis has written what was an email turned into a blog post (“I aint’gonna work on YouTube’s farm no more”) and about his reasons why he’s not going to accept YouTube’s second-round of content creator funding. At the happy risk of Jason once again calling me names like “jerk” (because I challenged his take on blacks in tech that, well, upset a lot of blacks in tech), I’m going to explain why, once again, Mr. Calacanis is wrong.

Let me start with this: YouTube never approached me and offered seven-figures to make videos at Zennie62 on YouTube. Blessed with that advantage, and a little technical curiosity, it’s really hard to fail. But when you come in and have to boostrap, and play within the rules, as I have done, you then really understand how YouTube works, and does not work, and how it has changed over time.

I’ve been a YouTube Partner since April of 2008, in fact, I still have the welcoming email from YouTube. Over that time I’ve made, to date, over 2,500 videos, and as a credentialed vlogger (yes, you read that correctly) covered everything from The Oscars and Comic Con, to The NFL Draft, The Democratic National Convention, TechCrunch Disrupt, and even The Crunchies, as Mr. Calacanis should remember. Being a YouTube Partner has changed my life, made me see how society has changed and help reflect that, and made me a better and more confident person.

Over that time, I have gained revenue from Google AdSense – enabled ads on the Google and YouTube system, and from sponsorships of various types that I set up myself. My videos have seldom been uploaded without them being embedded into my blog network, and I run 78 of them. I would never consider the common habit many content partners (including Calacanis) have of just issuing a video without a social media distribution channel strategy that includes blogs, and message boards, Facebook, Twitter, and all of the other platforms accessible.

I have done that to overcome the fact that I had fewer subscribers that others, even though the content I produced was, for the most part, well-received. But what I’ve experienced, to be frank, is that there are two problems: 1) YouTube tends to have the appearance of playing favorites among content partners, 2) YouTube’s program is designed to allow content partners the flexibility of deal-making that, if Jason’s desire to want YouTube to have its own marketing and ad sales force were in play, would be taken away.

Before I get to that, let’s get some ‘ugly truths’ out of the way.

Subscribers Aren’t Always Gotten The Way You Think

You see, the ugly truth behind the growth of a number of channels has been the use of services, that allow you to buy subscribers. This is the part of YouTube that people don’t like to talk about, but it has gone on. It was a hot practice between 2008 and 2011, and before YouTube’s new leadership at that time adopted the practice of removing some channels that adopted the practice, and then deleting other channels the minders considered “inactive.”

But some people, and I’m not pointing a specific finger at anyone, but stating a fact, have benefited from the approach of buying subscribers. Others have used services where they’ve purchased views, or both. I don’t know if YouTube looks the other way, or just plain misses some channels (they certainly look at me because I make a lot of content) but this issue has been a message board discussion for some time.

YouTube Plays Favorites In The Ad Game

The second truth is that YouTube plays favorites in the Ad game. I happened to learn this completely by accident during the time, about a year ago, when TRX, the fitness equipment company and YouTube content partner, was running an ad that appeared before one of my videos. Since I know people that work for TRX, I called a friend to complement them on the advertisement. I said I don’t believe in spending part of my Google AdSense revenue for a ads on YouTube, because I believe in having SEO do the job. The response I got was shocking: “We didn’t pay for the ad. Someone at YouTube liked what we were doing and contacted us.”

That was really hurtful, and it factored in to my belief that the current YouTube leadership looks down on what I call “the classic vloggers” like Renetto, who weren’t concerned about making shows, and were far more interested in communicating and sharing ideas and experiences – in other words, grabbing a camcorder and letting it rip. That approach marked what I call “The First Generation of YouTube Partners,” or from 2005 to 2008 – after 2008 more and more YouTube channels owned by television personalities like Oprah (the first in November of 2007), and brands like Ford, or “The Second Generation of YouTube Partners,” started to be established (“The Third Generation of YouTube Partners are true, scripted, shows.)

When Oprah came on many of them made videos in protest, and Renetto and others established a platform for classic vloggers called Vloggerheads.

Meanwhile YouTube started to favor what I call styled and edited “show videos” with jump cuts, and other “cute” styles. I don’t want to do “shows.” Pure-form vlogging works, and having had a TV show on the DISH Network called The Blog Report With Zennie62, which lasted from 2009 to 2011, I know there’s a market for it.

From 2010 forward, the investment community started to see video channels as having the same value as blog networks, and some were able to gain angel investors. Meanwhile, YouTube expanded the “meaning” of what constitute a partner, and included people who made videos that happened to go viral. In other words, a video like the one made by “The Crazy Cat Lady” were their ticket to YT Partner status. In a meeting in 2010 at YouTube Headquarters, I asked if there was a staffing plan for YouTube to handle the demands that would come with the dramatic growth in the partner program, and the long answer was no. I warned that staff would become overloaded if a plan wasn’t in place.

I think, what has happened, is that YouTube runs by relationships much more than by a detailed, comprehensive plan, and so it sets up an environment where some content creators benefit and others don’t and can be taken advantage of by, say, a network – if they’re not careful. Since I believe in establishing relationships, I’m not saying this is a bad thing, but just pointing out that it does exist. Relationships matter in business.

Into this World, walks Mr. Calacanis.

Because of whatever relationship he has, and I applaud him for it, Jason has gained a seven-figure advantage from YouTube, but then complains that it’s not the best deal because of the 45 percent tax on ad revenue he gains. Then, he says he turned it down for the following reasons:

1. The 45% YouTube tax
2. A lack of marketing support
3. No direct sales force at YouTube
3. $0.20 to $0.30 on the production dollar in support (according to sources)
5. Trust

The problem is that, as I understand such YouTube investment “gifts” as I call them, there’s no restriction on what other sources the content partner can leverage for additional funding. Thus, a venture capitalist or angel investor can add to that seven-figure amount. Jason’s not “stuck.” I do agree that the 45 percent take is large, but then it is supposed to hold YouTube to the task of promoting your channel. That’s a benefit I don’t enjoy. But also, even under that system, YouTube does not block you from establishing other sponsorships and finding ways around the 45 percent ask. Again, that money is not for hosting videos (YouTube does that for free in all YouTube Partner cases), its for the promotion of the channel. It’s an investment they ask back in place of putting your ads and promos up in spaces where normal money-making ads would go. I get that.

It’s promotion that’s the issue. That’s where the trust factor comes in. But again, if I’m getting seven figures from YouTube, there’s nothing preventing me from paying my vloggers to blog, and working sponsorships with the blog, and not the channel, but that benefit the operation of the YouTube channel.

If Jason got the marketing support staff and sales force program for YouTube he wanted, my fear is that would come in with a lot of strings attached to it that would take away the deal-making freedom that’s currently enjoyed. With internal marketing and sales staffs come the desire for control – over you.

Trust Is In The Eye Of The Relationship Holder

Jason referred to “trust” as his final issue, and on that note, I can report that I fully and totally trust the YouTube Partner Staff, including Chris Rewak and Jim Woods, and others. They have consistently sided with me in some very nasty copyright battles, and have been rewarded with the fact that I was correct. And because I respond immediately to such problems, and give complete detail in that regard, and occasionally blog about issues that have emerged, they value my input.

My only issue, and it’s an enormous one, is the number of YouTube / Google Project Managers, who’ve never, and they’ve personally told me this, made one video. (At last year’s PLAY Conference at UC Berkeley, the majority of YouTube representatives held that distinction.)

Think about it. A YouTube staffer, an employee of the premier video-sharing site in the World, who’s never made one video for YouTube. That means that person, generally with the title of project manager, has zero knowledge of the idiosyncrasies of the website. If a new code on the site that allowed you to move one playlist up or down on your channel wasn’t working, they’d not know about it. If video processing times were slow, they’d not know about it. I could go on and on, but it’s dangerous to have staffers who don’t use the product. Such information is critical in how project managers work with users of the YouTube site. That state of affairs must be changed.

In closing, I love YouTube, and that means the people who have started it, grown it, and are with it today. The only change I’d like to see is more of a respect for those, like me so this is self-serving, who have been there from the beginning, and are still contributing to the site. Particularly us “classic vloggers,” like myself, who don’t wish to make stylized shows, just keep it simple, and use the medium to show the World as we see it.

In the beginning years, the top YouTube videos were those involved in conversations with other YouTubers – that’s gone. Now, we have giant networks of channels – I’ve been approached by them several times. These masters of the hard-sell of why you should join them just want a percentage of your Google AdSense money and in exchange for the same promotional activity that Jason’s received from YouTube, but with one difference – he got upfront cash.

I have turned down the networks because the benefits they offer are ones I enjoy: direct YouTube staff access and a large social media network that’s under my full control. What bothers me is the networks are bringing in, or in some cases bullying, content creators to join them, then making it hard for them to get away. If that behavior keeps up, YouTube will have to step in the clean up the mess.

YouTube will also have a problem with what I call “layered” services that offer distribution help for a price, promising the ability to have your video seen by “millions of viewers,” and presenting an analytical system that rivals that of the YouTube Partner Program.

If that’s allowed to continue, it will destroy, or at least erode, the value of the YouTube Partner Program. The process is slowly turning an “inny” to an “outie.” It should not be. There must be a return to the original exclusivity of the YouTube Partnership. YouTube should benefit those who make more content, and hit predetermined targets, rather than this constant, rampant expansion of the program.

Oh, and give me seven-figures. I’ll show you what’s really possible on YouTube.

UPDATE Supplemental

As a supplemental, I have asked, and asked for YouTube to install a Disqus-like comment system where I can block the use of certain words. I am called the N-word on the average of 50 times per month. I should be able to stop that. Advertisers don’t want to see it, and I shouldn’t have to deal with it. Moreover, it allows me to have comments and avoid shutting down the system for everyone because of a few evil people.

Stay tuned.

Zennie62 is also a YouTube Channel. In fact, Zennie62 is one of the first group of Youtube Partner Channels dating back to 2008. News commentary and news video-blogs are uploaded daily.

Zennie62 is a part of Zennie62Media and annually covers the NFL Draft, Comic Con, WonderCon, International CES in Las Vegas, the Academy Awards, and numerous tech events.

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About the Author

Zennie Abraham is the founder of Zennie62Media which consists of http://www.zennie62blog.com and a multimedia blog news aggregator and video network, and 78-blog network, with social media and content development services and consulting. Zennie is a pioneer video blogger, YouTube Partner, social media practitioner, game developer, and pundit. Note: news aggregator content does not reflect the personal views of Mr. Abraham. Visit http://www.youtube.com/user/zennie62 and http://www.tout.com/u/zennie62 - follow on Twitter @zennie62