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.