Grace Helbig Breaks Up with My Damn Channel

/ Nov 26, 2013

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Custody Battle Begins for “DailyGrace” — A Cautionary Tale of IP + Ownership on YouTube.

There’s a phrase that’s thrown around to refer to the current status of the online video industry — it’s the “Wild West.” Only, we’ve been in the “Wild West” for the better part of a decade. The industry has come quite far despite this perception — budgets are growing, VC investment is at an all-time industry high, there are real programming “formats,” viewership is starting, er, trying to catch up to TV, distribution and international windowing are real strategies, and YouTube creators like Jimmy Tatro, Joe Penna, and Grace Helbig are signed to A-lister Hollywood agencies — UTA, CAA, and WME, respectively.

So when I think of the immaturity of the deals being built even two to five years ago, I somewhat cringe. And what could be more cringe-worthy than one of YouTube’s most eligible ladies — Grace Helbig — not having ownership of her own channel, DailyGrace?

Let’s back up. DailyGrace — the show, and the personality — exists because Rob Barnett, CEO of YouTube comedy network My Damn Channel, discovered Grace through her short-lived show “Bedtime Stories” and vlogs on YouTube.

We dug up a few legacy episodes here:

In 2008, when Barnett discovered Helbig, who at that time went by “Graciehinabox”, “they wanted a person who could interact with viewers and make My Damn Channel a more unique and personal experience. And that’s what I’ve been trying to do since,” Helbig said in an early interview.

At that point, My Damn Channel and Grace conceived and developed the DailyGrace persona, airing exclusively on My Damn Channel until 2010 when DailyGrace launched a YouTube channel. Now, DailyGrace, the YouTube channel, has over 198 million video views and nearly 3 million subs, generating up to $730,000 in annual earnings (at the top end) according to SocialBlade.

So where does that leave the valuation of Grace Helbig in relation to DailyGrace and vice versa?

To Helbig’s credit, the always-lovely comedienne will live on through her many self-made projects like “Camp Takota” (which also caught a stroke of misfortune when the film’s distributor, Chill.com, announced it would fold), TV and film work, brand endorsements, sponsorships, and comedy shows.

But sources close to Helbig and the failed “renegotiations” have told VideoInk that she will, indeed, leave My Damn Channel to join another network.

Losing its biggest moneymaker channel is a hefty problem for the six-year old comedy pioneer, which is said to be deep in negotiations to get acquired by a “major media company” or another, deep-pocketed digital division looking to go “Beyond” traditional realms. (More on this over here.)

But working in My Damn Channel’s favor is the value of the IP associated with DailyGrace. Pending a network can guarantee nearly half a million upfront to Helbig for a year (which basically leaves Maker Studios and Fullscreen), DailyGrace will be left to one of two fates — the same network could either acquire the channel and brand or, in a much sadder twist, five years of “DailyGrace” will be vaulted in the My Damn Channel library.

We’re also told that in the final days approaching 2014 that Grace is prohibited from annotating or driving traffic off of the DailyGrace channel and on to a new (or the old, ahem, Graciehinabox) channel.

So for now it’s a race to see which scenario plays out first and how Grace Helbig, the creator, fares if she is forced to shed her DailyGrace baggage.

We asked Jody Simon, a veteran entertainment and new-media lawyer at Fox Rotschild, how he would value Helbig’s brand if and when she moves on from My Damn Channel and DailyGrace. His answer:

“Grace is pretty ubiquitous but with middling viewership. So much depends on how the MCN sees her brand fitting into theirs for cross-promotion with their other stars, and how their ad sales and sponsorship people see her fitting in with their relationships. Unless Grace has an infrastructure, the MCN will generally want to run the ancillary sales, but she may have great management and vision. These things are still negotiable. Advances can total from $25k-$1,000,000 depending on constituent elements and CPMs of $3-4 are decent.”

In any case, this is probably  not the last time that we’ll be reminded of the fact that the “Wild West” in online video wasn’t all that long ago. And it’s a cautionary reminder to creators who are co-producing content — content may be “king,” but whoever holds the rights has the keys to the kingdom.

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  • pissedaf

    If My Damn Channel takes Grace from me I swear to god I will be done with them

    • jamee

      me to there isnt a “DailyGrace” without Grace.

  • GraceFaceLover

    Damn it! Screws everything up.

  • Desmond Newman

    I agree. That My Damn channel will be done like leftover steak in the trash if Grace is gone.

  • Matty

    Well the only person I watch on MDC is Grace, so if she moves I will still be watching her!

  • Candace

    they are nothing without Grace and they know it.

  • John Bonham

    Sounds like this could get messy and drag out for a while. Might hurt both parties in the long run.

  • give me grace or give me death

    MDC would be nothing without Grace, plus they have to think about how many pissed off teens there will be(directed towards MDC) if she doesnt get to keep DailyGrace, ugh. Grace brings me joy every friggin day i cant imagine youtube without her :/

  • GorsuGra

    This makes me so angry. Poor Grace, what the fuck did she do to deserve this crap, besides be the only substantial source of income for MDC?

  • I just love her.

    I will watch Grace Helbig no matter where she is.If she is not on MDC, i won’t watch it.

  • Leanne Mullen

    Grace was the only reason I ever even heard of My Damn Channel, she is the most successful person they have and she was the one who introduced most of us to MDC. I have lost a lot of respect for them, you would think they would just be proud of the work they have all achieved and be happy for her moving up in her career and having come so far, but no they got greedy and are now upsetting her MILLIONS of subscribers. I think they need a wake up call and realise their mistake, Dailygrace has brought them their success.

  • TeamHelbig

    NOOOOOOOOOOOOOOOOOOOOO :'( Please let this not be true :'( This is so sad and emotional:( She does not deserve this ffs!!!!!

  • Elizabeth

    I think a lot of these companies don’t fully understand how to handle internet personas and content. Viewers become connected to the people they watch in a way that didn’t happen with tv or movies. We are far more loyal to these “youtubers” and view them as our friends more than characters in movies.

    And while they can legally keep Grace from driving traffic to her new channel, word travels fast on the internet. I personally found out about this via John Green’s Facebook page. Any of her regular viewers will easily be able to find her again. Plus, this attention could lead to new viewers. In the past I only watched her occasionally when I came across her work now and again. But given this news, I’ve subscribed to her new channel. I think Grace will be fine… My Damn Channel… well, they’re the ones in the hot seat, if you ask me.

    • Joyce

      True, very very true. I actually care about the people I follow on YouTube. It’s not the channel I like. It’s the people who I see and connect to.
      Luckily, she has a huge following amongst other youtubers and they have plugged her new-old channel to the max. More power to her and them. :)

  • aya

    Grace is better off by herself anyway, she can do whatever she wants now & most youtubers are already promoting her itsgrace channel, so it’s all good. her loyal subscribers will for sure spread the word like wildfire (:

  • SCS

    From a Public Relations point of view, MDC have REALLY shot themselves in the foot here. It seems the majority of their viewers were only there because of Grace, as others have said, I was only ever interested in watching her and never bothered to look at the others on MDC.

    And what will happen at the next event? Will MDC even have a presence? Will they be chased out of the venue? The community is clearly a close one, and this is proven by the unsubs from DailyGrace and the 500K appearing on her new channel within ten days.

    MDC should have thought long and hard about this before they screwed her over. The damage this will do to their brand could be disastrous, and all for saving face in a legal sense.

    Comedy is supposed to make you feel good, while MDC has exposed itself as a corporate “monster” willing to be ruthless in the pursuit of profit. The two are not good bedfellows.

    It seems to me that she gave a lot to them, while getting little back in comparison, and now they’ve done this too, I can predict they’ll be a distant internet memory within 12 months – while Grace herself will be able to continue on to build her career with integrity.

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