Fabric Notable Stories, Special VidCon/Brexit Highlights Edition, June 23, 2016

By David Bloom

Lots of data dumps on the main stage at VidCon’s industry track, held high above the adoring masses of tweens milling on lower floors with “Community” or “Creator” badges below. Emcee Jim Louderback promised to post the stat-stuffed presentations by several notables, including Mike Vorhaus of Magid Associates, Rich Greenfield of BTIG, Dana Settle of Greycroft and Mark Suster of Upfront Ventures. Not clear where in the site those will be posted, but I’ll keep checking.

In the meantime, we have highlights and quotes to share:

  • VidCon co-founder John Green’s keynote suggested that merely chasing growth isn’t always the path to happiness and called for more focus on serving passionate and focused audiences.
  • “Creative projects do not exist to create revenue. Revenue exists to fund creative projects,” Green said.
  • “Online Video has been about hearing the voices we wouldn’t otherwise hear,” Green said.
  • John’s Vlogbrother/co-founder Hank Green celebrated the 6-year-old show going from 1,200 people in a Century City hotel ballroom to 25,000 overstuffing the mammoth Anaheim Convention Center and two neighboring hotels. It mirrors the online video ecosystem as a whole, and awareness by traditional media and news organizations: “We’ve gone from ‘Cats!’ (videos) to ‘Ok, there’s something going on; we’ll talk to the top 5 creators.”
  • VidCon’s announcement of new satellite shows next year in Amsterdam and Melbourne are about trying to give a bigger platform for the burgeoning group of international creators deserving a more high-profile spotlight than is possible with the main Anaheim show.
  • Magid study of 1,600 people at least 8 years old shows “a slow drip, drip” away from Pay TV, Vorhaus said. “Don’t go shorting Disney tomorrow. It probably has the best collection of channels, as does Time Warner.”
  • He repeatedly urged attendees to go to China, to see the results of an intensely mobile-centered middle class of 700 million people conducting much of their lives and business through Tencent’s dominating WeChat app (he later told me that it’s even better to get the app in its Mandarin version, because that activates games and other services that aren’t distributed through the English-language version).
  • Holding his phone in the air, Vorhaus said, “The Phone is a TV set.” 46 percent of users 18-35 are routinely using their phone to watch video. Only 5 percent of that age group never use their phone that way. The numbers are even higher for younger viewers.
  • They’re also watching “full-length TV episodes” routinely, Vorhaus said. Type that phrase into YouTube and you’ll get 19 million hits. “YouTube is becoming a major destination for people to get long-form video,” Vorhaus said. “It could be a major player. YouTube is sneaking up on Hollywood.”
  • Binge-watching has now become a routine pattern for many people, changing their habits and expectations for programming. They don’t have patience to wait through ads, or wait a week for another episode. They’ll just binge-watch something else.
  • A majority of survey respondents prefer a paid model, 40 percent for SVOD, and another 16 percent for a la carte.
  • “Snapchat is already coming on strong,” with 27 percent of respondents regularly using the platform. “These numbers go from 20 (percent) to 40 to 60 very quickly. It will be the next big platform in the West. I don’t think anyone is going to catch WeChat in China.”
  • eSports “is a tidal wave. This is not a fad. It’s not disappearing.” 18 percent of gamers already watch eSports, and in 10 years, he predicted, the revenues here will outstrip golf.
  • Live-streaming was a huge topic at the show. Facebook’s announcement of 140 deals with creators for a total of $50 million; the announcement of the Live Fronts in October; Tumblr going live with four live-streaming partners; even the Periscope live streaming by Democratic Congressmen holding a sit-in in Congress, were all big mileposts. Several smaller companies were running splashy booths at the conference; one was giving contracts worth $500,000 to live-streamers who demoed their talents at its programs during the show.
  • That said, YouTube CEO Susan Wojcicki underwhelmed with the part of her presentation focused on live-streaming (see company-compiled notes on its presentation below). Wojcicki said the company had provided live-streaming resources since 2011. The company will add live-streaming capabilities to its existing YouTube Creator app. The company announced a consolidated set of creator resources, new YouTube Red programming and some other, lesser news.
  • One exec in the live-streaming space predicted to me that music performances would be huge. One of his company’s performers livecasts 6 hours a day, taking requests from viewers and getting “tips,” funds donated by fans (a common approach on Amazon-owned and gamer-focused Twitch). That performer had made enough to buy a house in a nice part of London.
  • The current huge base of YouTube talent won’t likely be very good at live, however, because it’s a different skill set, much closer to talk radio or sports casting (or sports talk radio). Holding someone’s attention for as much as a few hours is a very specific talent, and new stars will emerge, multiple execs told me. They’re right.
  • The CEO of AwesomenessTV, Brian Robbins, expressed something of an “above-my-paygrade” nonchalance over the coming acquisition of parent DreamWorks Animation by Comcast’s NBCUni division. “We’re still running the business pretty autonomously,” Robbins said. “The good news is that we have very deep-pocketed, ambitious partners who want to be in business with us.”
  • Awesomeness had an even bigger presence at the conference than two years ago, taking over a central plaza for day-long musical performances by some of its stars, and an elaborate, swinging-‘60s lounge for top-level creators in the security-conscious Hilton Hotel’s fourth floor.
  • Awesomeness already has a library of 800 hours of content it owns, will make 8 to 10 low-budget films featuring (and marketed by) many of its creators, and is creating series for partners such as YouTube Red and Verizon’s Go90 service. “We’re a studio and a network but it’s all in the service of the brand.”
  • Brand is big with Robbins, who said Awesomeness purposely took a different path, emphasizing that consumer branding approach, rather than the one taken by many of the MCNs. Where the company once had 90,000 creators, it now focuses on about 100 top-level channels. He said Vice Media has done a good job building with a brand in mind, and perhaps Buzzfeed in the news vertical, but virtually no one else has other than Awesomeness.
  • Jeffrey Katzenberg, who is expected to leave DWA after the sale is final, has been very involved with Awesomeness but particularly as “an unbelievable cheerleader. When I need him, he’s available” to make calls to reach an influential person or help persuade a creator to join Awesomeness.
  • The company’s very-low-budget films have generally been “very successful,” both financially and creatively, he said. Marketing costs are “nowhere near” $10 million per film (which is half what a typical wide release would spend at minimum). Robbins declined to be more specific. One project, ‘Before I Fall,” was acquired by Open Road for distribution next year, a big milestone.
  • “Pipes are no longer dumb, execs are dumb,” said Suster, the VC and frequent blogger. His point: companies such as Netflix and Hulu have built an intelligent layer on top of distribution platforms, in a manner similar to Wal-Mart allowing someone else to build and own the cash-register and other computer systems for its stores. Traditional TV “Executives dismiss those platforms but they’re capturing consumer primacy. (Networks and OTT providers are) competing for a share of time.”
  • “Snapchat is the most important media company created in the last five to seven years,” Suster said. It has reach, immediacy (you only have 24 hours to watch content before it disappears), authenticity and engagement. He noted that Snapchat also appears to have “stolen local live news away from Twitter.”
  • “I don’t know if Snapchat wants to be a media company or an instant-messaging company,” Suster said. “If it’s a media company, then it has some growing up to do. It needs 150 DJ Khaleds to enable this.”
  • “Content is about to become a lot more valuable,” Suster said. SVOD requires “must-have content” to drive subscriptions. “There are really passionate users and they tend to be passionate about different things and they will subscribe.”
  • With Instagram, Vine and Facebook now starting to pay creators, it’s never been a better time to be a content producer, but it will be different content producers” than the incumbents in traditional media.
  • The multi-platform networks will continue, but will need to keep diversifying. “YouTube is not your business. It’s a distribution channel,” Suster said. “You can’t be talent aggregators. You need tonnage as aggregators.”  The business model as talent aggregators is a challenging one that also is limited largely to fees in the 15 to 17 percent range.
  • The company with the biggest potential to disrupt the entire industry is Amazon. The company has “strength in all areas,” with the audience, the data, the devices and the delivery pipes, but it needs to “lean in on content,” Suster said. But with its diversified revenue  base, the company “doesn’t have to protect the industry’s margin structure. They don’t have to make margin on video.”
  • Settle and Greenfield marveled at how much the show had changed in a very short time. Vine, which had a big presence last year, is fading quickly. Sing-along social apps Musically and Busker were nothing last year and taking off this year. Snapchat is now SNAPCHAT.
  • “Netflix is B.A.E.” their slide said, pointing to some stats on user loyalty. 60 percent of those surveyed would dump Facebook, which is free, over Netflix, which is not. Younger fans spend two hours a day there. But Netflix is missing a social component that would make it easier for users to share their favorites. It’s now a closed experience.
  • Currently, 75 percent of online video viewers spend less than $25 a month on subscriptions, but SVOD services are blossoming. CrunchyRoll already has more than 800,000 subscribers. “They’re paying for the content they want,” Settle said.
  • Another slide was headlined “#GoodLuckBundle.” The future of the Pay TV bundle is pretty dark. The majority of young viewers “don’t have linear subscriptions. I think they’ll spend their money, but they’ll spend it in a different way.”





We will be posting our news across two blogs. The YouTube Main Blog (focused on YouTube Red Originals) and the YouTube Creator Blog (all other news including mobile live streaming).

PHOTOS FROM KEY MOMENTS: Photo credit: Filmmagic for YouTube




    • Engagement on YouTube is growing:


  • “While TV networks are losing audiences, we’re growing in every region and across every screen. Today, more millennials are tuning into YouTube on mobile during primetime than any cable or broadcast TV network.”
  • “And people aren’t just watching on mobile and desktop, they’re also watching YouTube in the living room. Last year, TV’s were our fastest source of watchtime growth.  So what are people watching in the living room? The same things they always watched: late night shows like Jimmy Fallon and John Oliver, fitness and travel videos. What’s new is that now that’s alongside all of YouTube’s talented endemic creators, many of whom are at VidCon with us today. It’s clear that digital media and traditional linear media are blending together.”
  • “Today, I want to talk about three things that all matter to creators on YouTube… —we can call them the 3 C’s; community, creation and creative ambition—so let me share a little about how we are approaching each to ensure YouTube remains the best destination for all creators.”


    • Creator relationship with fans:


  • “Almost 40 percent of millennial subscribers say YouTube creators understand them better than their friends do. And over 60 percent say YouTubers have changed their lives.”


    • Improvements to Content ID:
      • “In April, we announced steps to ensure that no one loses money while rights disputes are being resolved. We worked with our legal, our finance and our operations teams to set up a new solution that allow videos to continuing earning revenue while a Content ID claim is being disputed. We pay out money to tens of millions of creators every month, around the world, so this isn’t a simple undertaking. But we’re currently testing out the new monetization support and expect to reach 100 percent of all monetized users in next few months.”
    • Improvements to Comments on YouTube:


  • “We’re also working to improve comments by giving creators more flexibility to pin a comment at the top of their videos, include GIF’s in responses and even delegate comment moderation to their trusted fans.”


    • 360 & VR:


  • “With 360-degree video and VR, viewers can interact with their video environment as if they were actually there. YouTube has more 360-degree and VR content than any other platform. In fact, you can watch every single video on YouTube with a VR headset like Cardboard, making it the world’s largest library of VR content.”


    • YouTube Red Originals:


  • “Our original series are one of the leading drivers of YouTube Red subscriptions, with viewership that rivals similar cable shows.”
  • “We’re also seeing that creators featured in Originals actually get a boost in YouTube subscribers and watchtime on their main channels as well. And most of this watchtime boost is coming from viewers who haven’t watched that creator’s content before. It turns out that there’s a virtuous cycle between YouTube Red and our ad-supported experience.”
  • “And we’re seeing these Originals being consumed in a totally new way. Over half of the watchtime for YouTube Originals is happening on mobile phones.”


    • What YouTube stands for:


  • “Over the last year at YouTube, we’ve given a lot of thought about what we stand for, and we’ve identified a number of “Freedoms” that we believe in and want to promote at YouTube. This includes the Freedom of Expression: that YouTube gives everyone a voice. The Freedom of Information: that YouTube provides information to everyone around the globe. The Freedom of Opportunity: that anyone on YouTube can build a media business and the Freedom to Belong: that everyone can find connection and community.”


    • Creator growth momentum:


  • “Every single day, more than a thousand new creators reach the 1,000 subscribers mark.”


  • YouTube increases support to creators throughout every step of their YouTube journey:
    • First, “We’re making it easier for all creators to find the resources they need. Right now, creators have to navigate between more than seven different websites to find all of the resources available to them—from educational materials to the help center. This experience leaves them sometimes a bit confused. I’m proud to announce that we’re providing easy access to all our resources, through one door, not seven. What you see on screen is the completely redesigned Creator Hub that launches today, fully localized in 23 languages. The site is now live, and anyone can access it at youtube.com/creators. The new hub will be the central place where creators can discover all the programs that are available to them and truly feel a part of the YouTube community.”
    • Second – “We’re launching a program called YouTube for Creators bringing together a comprehensive set of solutions to grow on YouTube. No matter how many subscribers they have, through the creator Hub, every creator will be able to access resources available to them like Creator Academy, and our studio app to help them grow their community on YouTube.”
    • Third – more personalized support:  “Perhaps the biggest news of all, I’m proud to announce that every single creator who has enabled monetization on their channel will now be able to reach out to YouTube with a question and hear back from a real human being within one business day.  We currently offer that direct support to hundreds of thousands of creators. As of today, that extends to tens of millions of them.”


    • VR:


  • “We’ve already made big strides in democratizing the VR experience. We created Google Cardboard so that everyone with a smartphone could experience VR for themselves. Then we worked to make sure the world’s largest video library—YouTube—could be watched on a VR headset. But we didn’t stop there. This year at I/O, we announced the launch of a new YouTube app, built from the ground up for VR headsets as part of Google’s Daydream platform. The YouTube Virtual Reality app brings voice search, playlists and spatial audio to give you the ultimate platform for consuming high quality VR videos.”
  • “We’re also working to bring even more VR content to YouTube. We think YouTube’s incredible creator community is going to lead the way in showing the world the full potential of VR. We’re currently partnering with several leading VR production companies and pairing them with top creators, to test which formats work best in virtual reality. For example, no one knows whether makeup tutorials, vlogs, challenge videos or how-tos will work well in VR. But the experiments we’re running are designed to give everyone in the ecosystem an idea. We’ll release findings and learnings in the creator academy so that all creators can learn the best practices for VR Creation and Production. And we’ll have the latest VR cameras in all our YouTube spaces so creators large and small can begin creating VR content today.”
  • Mobile Livestreaming:
  • “We’ve been offering livestreaming since before it was cool. Millions of people around the world tuned in to watch the Royal Wedding in 2011. One-sixth of the Internet watched Felix Baumgartner leap from space live on YouTube in 2012. Last month we livestreamed the UEFA Champions League Final, the world’s biggest annual sporting event. And just this year, we became the first to ever broadcast a 360-degree livestream during Coachella. Over 21 million people tuned in to watch Coachella on YouTube this year—almost twice as many as tuned in to watch the series finale of American Idol.”
  • “Today, I’m pleased to announce a new chapter in in bringing the power of live video to creators everywhere. Soon, we’ll be putting the power of YouTube livestreaming in the palm of your hands.”
  • “YouTube mobile livestreaming will be baked right into the core YouTube mobile app. You don’t need to open anything else up; just hit the big red capture button right there in the corner. We created that capture button last year to make on-the-go creation easier than ever, and soon it will give you the to option to broadcast what you’re seeing live.”
  • “Viewers can also use the mobile notifications bell to get alerts when their favorite creators start a  livestream. We announced the bell just last year at VidCon and we’re already ringing that bell 10B times a month to help creators alert your subscribers.”



  • “With nine projects launched, we’re seeing fans sign up, tune in, binge and share their enthusiasm with their friends. And a ton of this activity is happening in just the first 24 hours after our new series go live.”
  • “I’m happy to announce today a number of new projects we’ll be releasing exclusively to YouTube Red subscribers.”
  • New projects coming to YouTube Red – the following are not direct quotes from Susanne, however,  here are the loglines. There will also be a blog post on YouTube main blog around 5:30pm:



SCARE PEWDIEPIE – SEASON 2: Produced by Maker Studios, the creator and executive producers of “The Walking Dead” franchise from Skybound Entertainment, and Felix Kjellberg under the Revelmode banner, the second season of the reality adventure series, Scare PewDiePie, promises even more thrills and chills. Press release here.

FOURSOME – SEASON 2: Produced by AwesomenessTV, the second season of Foursome returns to YouTube Red following Andie’s adventures in the high school dating world. We meet a brand new Andie, a new era of extracurricular hooking up and high school awkwardness.

UNTITLED SMOSH MOVIE: After releasing the episodic series Part Timers on YouTube, Smosh is coming back for a feature-length comedy on YouTube Red. Luckless Charlie (Anthony Padilla) moves into a new apartment, only to find he has a roommate: a self-centered ghost named MAX (Ian Hecox). Max makes Charlie’s life a living hell, until they learn that the only way Max can get into heaven is by working together.


STEP UP SERIES: Step Up, a fan favorite dance film franchise that launched the career of Channing Tatum, transitions to a new series with a heart-pounding, sexy, music-filled and dramatic look at dancers in a contemporary performing arts school. Adam Shankman, Jennifer Gibgot and Meredith Milton, all producers of the original Step Up films, will executive produce the series, along with Channing Tatum and Jenna Dewan Tatum, who both co-starred in the original Step Up film. Press release here.

RHETT & LINK’S BUDDY SYSTEM: In this new scripted comedy series, Rhett & Link must go out of their way to regain control of their internet empire from their mutual co-ex-girlfriend who is now an evil Infomercial Queen holding a very big secret over their heads. The series also features Saturday Night Live alums Molly Shannon and Chris Parnell, as well as Leslie Bibb and Page Kennedy.

DAN & PHIL TOUR DOCUMENTARY: Top YouTube comedy stars, Dan Howell and Phil Lester are taking their fans inside their latest world tour, The Amazing Tour Is Not On Fire. With hilarious anecdotes, sketches, and lots of surprises for their fans,  we’re bringing Dan and Phil’s successful live stage show exclusively to YouTube Red. They’ll also be giving audiences a behind-the-scenes look with a documentary about the making of the tour.  

VLOGUMENTARY: Executive produced by  award-winning filmmaker Morgan Spurlock, Maker Studios, and Shay “ShayCarl” Butler,  Vlogumentary provides a personal, intimate lens into the world of some of YouTube’s biggest creators and demonstrates the power of the platform in shaping the lives of creative voices, their audiences and the media landscape.

UNTITLED ANIMATED SERIES: Top YouTube creators SeaNanners, TheMrSark and VanossGaming star in an animated comedy series, helmed by Michael Rowe, Emmy Award winning writer of Futurama and Family Guy, about a team of ill-equipped paranormal investigators who struggle to unfold the mysteries of the paranormal universe for their desperate clients.

UNTITLED MICHAEL STEVENS PROJECT: In this new educational series, Vsauce creator Michael Stevens will take a deeper look into the human mind, using real subjects, including himself and special guests, to show some of the most mind-blowing, important and least understood aspects of human nature.

Additionally today – separate from the keynote – YouTube announced:

Digital Media, Streaming Media

Google’s secret weapon against Netflix: Channing Tatum

By Ethan Baron


Google’s YouTube has acquired its first big-budget Hollywood-made TV series, to compete against Netflix and cable firms. The series, to be based on the “Step Up” dance movie franchise that grossed $650 million at the box office and propelled actor Channing Tatum to stardom, will be offered on YouTube Red, Google’s $10-per-month, ad-free streaming service…


Brexit Wallops Stock Markets

It’s far too early to have any real idea what Britain’s shocking decision to leave the EU will have on tech and media companies, many of which have significant operations and audiences there. It is safe to say some unanticipated heavy weather lies ahead, especially because the decision comes at a time when the EU is already facing so-so economic conditions, security worries over ISIS-inspired home-grown terrorists and trying to integrate, or at least manage, a flood of immigrants. Will Scotland try to leave the UK and rejoin the EU (I would say likely). Will this affect London’s status as a financial capital? What does it mean for the many Brits with jobs in the EU who no longer will have status to work there? This one will take a while to sort out. – DB

Brexit, Media

Industry Reacts To Brexit Win; Media Stocks Crash; Execs Plan For Uncertainty

By Nancy Tartaglione and Ali Jaffar


Reactions have rolled in from industry execs following last night’s vote by Britain to exit the EU and as media stocks crashed in London. Harvey Weinstein, who has major television dealings in the UK and is in Cannes for the Cannes Lions Creativity Festival, told Deadline he is “shocked” at the outcome which he called a “disaster.” Wild Bunch co-founder Vincent Maraval sees it slightly differently: “I’m sad because my wife is English and she’s sad. But I’m happy because I hope that Europe will realize that it must build itself on cultural bases and not economic.”

Brexit, Tech

What Brexit Means For Tech

By David Meyer


That means years of uncertainty, with tech firms and investors unable to know for sure how regulations will evolve (or devolve) in the U.K. and, indeed, the EU.

As Stratechery’s Ben Thompson has correctly noted, the U.K. is one of the voices in Europe that has called for relatively light-touch tech regulation in the EU. Without it, Germany and France will have even stronger positions in the bloc than they currently do.

Brexit, Tech

Tech stocks plunge after Brexit vote

By George Avalos


Some analysts believe that technology companies might have differing fortunes depending on their business operations in the U.K. and other European nations.

Plus, big American tech companies such as Google, Apple and Microsoft have undergone varying levels of antitrust scrutiny and litigation.

The Brexit vote raised uncertainties as basic as to whether the United Kingdom would survive intact in years to come and whether the euro would continue as a viable currency.

Amazon, Digital Media

A Prime misunderstanding: explaining Amazon Prime’s success

By Richie Segal


What sets Amazon apart is its undivided focus on improving the customer experience, something Bezos has talked about at length. He is so committed to doing so that the short term financials of the company are free to suffer, as they did with Prime, which was bleeding money early on. But the short term didn’t matter, since the long term behavioral effect—shoppers defaulting to Amazon—is so powerful that Amazon will be cashing in on this behavioral modification for decades. Prime latched on to the power of defaults, knowing that the result of a customer browsing first on Amazon would be immensely more profitable than the $79 membership fee, which has since been raised to $99.

SEO, YouTube

Reverse Engineering The YouTube Algorithm

By Matt Gielen


YouTube doesn’t make the variables that factor into its algorithm public. So, to figure out how it works, we must peer into a very big and very dark black box with very limited data. There are also factors at play that we have absolutely no data for whatsoever. These data points (such as thumbnail and title impressions, user viewing history and behavior, session metrics, etc.) would shed a lot of light on the algorithm. But, alas. They don’t exist.

Traditional Media, Sports

The Sports TV Well Has Run Dry

By Anthony Crupi


the broader takeaway is that the feverish sports dealmaking that informed the last few years will now subside. For all intents and purposes, there are no more major sports portfolios left to be acquired. The cupboard is bare and will remain so through the start of the next decade.

Digital Media

Billboard’s 2016 Digital Power Players List: The Industry Leaders Shaping the Game

By Billboard Staff


THE MUSIC BUSINESS SAW IT COMING. For the first time, global revenue from digital music sales significantly surpassed physical sales, according to 2015 figures that worldwide record-industry trade group IFPI reported in April.

With music industry revenue at $15 ­billion, digital sales now account for 45 percent of that figure and physical sales 39 percent. (Performing rights revenue accounts for most of the balance.) Just a year earlier, digital and physical were almost even. What’s more, the stream is ­becoming a flood. Streaming music now accounts for 43 percent of global digital music sales, and streaming consumption of music in the United States in 2015 rose 93 percent.