Industry Reactions to Zappin vs. Maker Studios

/ Jun 27, 2013

maker

So, yesterday was interesting.

Maker Studios isn’t a stranger to controversy, having been involved in multiple disputes with talent and industry people (both in the public and behind the scenes) since the company was founded in 2009. So when news broke yesterday that one of Maker’s embattled co-founders, and former chief executive, was suing the company for essentially “ousting” him, it had a certain air of inevitability.

In fact, when I went searching for some commentary about the Zappin/Maker suit, that was pretty much the response I received from those I spoke to.

“Duh,” said one person who wished to remain anonymous, citing relationships on both sides of the dispute.

“This makes way more sense than the smooth transition that was sold to us last month,” said another.

It was only a matter of time before Zappin had to step down as CEO, said a third source wishing to remain anonymous. “I was surprised it was just Zappin, and not the other founders. If they truly want to shed stigmas, others should have been removed as well.”

Maker has had some serious cultural issues since its inception, according to multiple people with knowledge of the company and its executive team. They cited the number of prominent former Maker talent and executives who have exited the company, including Philip DeFranco, Ray William Johnson, Shane Dawson, and Ezra Cooperstein, as evidence of a repeating pattern of trouble which Maker can’t shake away from. “The fact that major YouTube creators, founders of the company, and top-level employees have left Maker [since 2009] speaks more to the obvious issues of not just Zappin, not just who is still at Maker, but also the multi-channel network system overall,” said one of the people I spoke to.

I asked an industry executive about Maker’s troubled history with creators. His response was that “creators are going to have opinions on how they are being treated that are neither right or wrong. At its core, any business needs to make money and build value. And Maker is doing that off the backs of creators. In some cases, creators will benefit and in other cases, they won’t.”

The larger issue is still the cultural dysfunction that exists at Maker, he said. Maker is unlikely to win any awards for how it interacts with talent, but neither would a traditional media company like Warner Bros. It’s this issue that Maker needs to overcome if the company wants to grow as a business, he said.

Some are concerned about how this dispute will affect the views and opinions people have of the entire online video programming business, which is still in many ways scratching and clawing to gain respect among advertisers and traditional media companies.

“I think it’s insane that they went public with the lawsuit,” said yet another industry executive wishing to remain anonymous. “It is incredibly damaging to the legitimacy of the business to have this kind of public fighting while we’re trying to establish the credibility of online content networks.”

“It’s very easy to look at where Maker is today, and draw conclusions about the broader YouTube and online video business. I think those conclusions would be incorrect,” added another source, arguing that the issues with Maker are specific to Maker, and should not be used to form an industry-wide indictment on the original online video business.

Maker emailed me a statement last night, which read: “The lawsuit is without merit and the allegations are baseless. We regret that Danny is taking this step and involving the Company he co-founded in litigation.”

It’s easy to read that and assume we are in for a long, drawn-out dispute. Considering Maker’s track record, we can expect most of it to be played out in public, which means the worry over how this situation could affect people’s assumptions of the online industry is definitely in play.

It’s an interesting concern, though. Especially considering how Hollywood is not exactly immune to lawsuits and catfights (just read Deadline’s coverage of the Ari Emanuel/Irving Azoff spat if you need a refresher). In fact, a lot of what I have heard about what goes on at Maker feels like “same shit, different industry.” But I guess when an industry is still really young, and “shit” like this pops up, it feels more important than it really is.

Stay tuned, I guess.

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