How We Dealt in 2013

/ Dec 31, 2013

MoneyBag002

A lot of things happened in the online video industry in 2013. But maybe none were more emblematic of where the industry is, than the following three:

DreamWorks Animation Buys AwesomenessTV

When it happened, it was a big deal. To this day, DreamWorks’ decision to acquire Brian Robbins’ YouTube-based teen network remains the moment when even the naysayers started treating online video (and specifically YouTube) a little bit more seriously. Here was one of the most successful Hollywood businessmen giving a $100 million vote of confidence to a content company that was barely a year old.

Aside from serving as a major milestone, DreamWorks’ purchase of AwesomenessTV also signifies why traditional media is interested in the YouTube space. “What’s most interesting [about that deal] is that a big studio was really interested in the footprint AwesomenessTV had,” says David Freeman, co-head of brand coverage at CAA.

To a certain extent, as DreamWorks CEO Jeffrey Katzenberg himself has said in the past, this means AwesomenessTV’s ability to reach younger demos where film and TV can’t — while they’re on the go.

But Freeman also sees this deal going another way — he believes DreamWorks will eventually use Awesomeness TV as an “incubation play.” Both companies target the same core demo, so it makes sense that DreamWorks would eventually test and iterate concepts via AwesomenessTV, before investing serious money in that project for a traditional media platform. “I think we’re going to see a lot more acquisitions like this deal,” says Freeman. Traditional production and media companies, who know the importance of digital, will increasingly work with new-media companies to drive audiences to other screens as well as identify up-and-coming talent, he says.

In the future, Freeman sees digital as a first window, then merging to TV/digital as younger consumers increasingly get accustomed to watching their favorite content across platforms. That’s going to become much more of a standard thing as consumers become comfortable with content overlapping across screens, he says. And all of this will be possible because traditional-media will continue to invest in and acquire new-media content creators.

Shane Dawson Sells TV Show to NBC

Everyone is waiting for the moment that a YouTube creator breaks into traditional media (film or TV) in a big way. To be fair, this has already happened if you consider creators like ‘Fred’ star Lucas Cruikshank and “The Annoying Orange,” says Brent Weinstein, head of digital media at UTA.

But as successful as those properties have been, one can argue that there is something extra to Shane Dawson’s deal with NBC to produce a workplace comedy partially based on his own life. Say what you want about the decline of television, it still means something to have a show on a broadcast network. Even in this fragmented landscape, broadcast channels still command the most viewership. Success there would be a major moment for the YouTube ecosystem.

So how did it all come together? Well months prior, Shane Dawson had signed a deal to be repped by UTA. As Weinstein tells us, when Dawson first met with UTA, he pitched his idea for the TV show. “It was clear that it was a big priority of his,” says Weinstein. “During network development season, his TV agents introduced him to our clients Will Gluck and Darlene Hunt, both of whom came aboard this project.” The show was first sold to Sony Pictures Television (where Gluck has a deal), and then to NBC.

If “Losin’ It” makes it to air, a lot of eyes will be on Dawson to see if he is able to bring his fans with him. UTA was banking on this when it linked up with him: “We want to work with artists who have a unique voice and vision,” says Weinstein. “Shane has both in spades, and also has a large audience that we believe will continue to support him in digital, but also follow him into more traditional media.”

If so, expect to see even more interest in the YouTube ecosystem, which in 2013 did begin to show signs of maturity (or cabin fever). Jimmy Tatro had a small role in Adam Sandler’s “Grown Ups 2,” and is set to appear in Jonah Hill’s “22 Jump Street” (UTA also reps Tatro). The Fine Bros. signed with WME with the intention of moving into film and TV. On the CAA side of things, David Freeman points to KevJumba’s starring role in “Revenge of the Green Dragons,” a gangster film that’s being executive produced by Martin Scorsese. Another CAA talent, Phil DeFranco, has linked up in a big way with Discovery Communications, which no only bought DeFranco’s content business but has put the man on air during the company’s annual “Shark Week” programming.

YouTubers are already being treated like mainstream celebrities: “We look at our digital clients the same way as our more traditional clients, in that they are artists and brands that have tremendous opportunities across a number of different platforms,” says Weinstein. So it’s only a matter of time before they become the mainstream.

“In 2014, we will see a continued gold-rush of film and TV producers looking to the web for formats and personalities to develop projects around,” predicts Weinstein.

Alloy Digital Merges with Break Media

Consolidation was a big part of 2013, not just in terms of traditional media and new media, but within the online video ecosystem itself. Maker bought Blip in August. Two months later, Alloy Digital and Break Media, two companies specializing in reaching young viewers online, decided to supersize by merging forces.

The new company, called Defy Media, is an attractive bet for those looking to shop digital content. Having worked with both companies independently, David Freeman points to how both Alloy and Break, and now Defy, have the “trifecta” — a strong presence on YouTube, owned-and-operated websites outside of YouTube, and a robust syndication network. “I think Defy is a really interesting play for advertisers, and interesting for CAA and our clients — the company offers a strong platform to incubate projects with.”

What’s important here, though, is how Defy has a business that is supported by YouTube, but is not reliant on it. It’s been a big question mark for YouTube-based businesses throughout 2013 (how to build a revenue stream outside of YouTube advertising), with some companies addressing it via acquisitions. In addition to the Maker/Blip deal, which gave Maker Studios an owned-and-operated video player technology to build websites around, Collective Digital Studio used a custom video player for the second season of Freddie Wong’s “Video Game High School.” (CDS had bought online video pioneer Metacafe in 2012.)

Expect more mergers and acquisitions (murders and executions?) within the online video industry in 2014 as digital video businesses continue to reach for more ad dollars.

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